ET:Gold eases with euro, commodities ahead of EU summit
LONDON: Gold prices eased in Europe on Wednesday, pressured by the softer tone to the euro and other commodities like crude oil, as expectations faded that this week's European Union summit would do much to ease the euro zone debt crisis.
A move towards common euro-zone bonds at the summit, which had been seen as a potential solution to Europe's three-year-old debt crisis, appeared to have been ruled out after German Chancellor Angela Merkel said it would not happen "as long as I live".
Spot gold was down 0.3 per cent at $1,567.30 an ounce at 0932 GMT, while US gold futures for August delivery were down $6.60 an ounce at $1,568.30.
Prices are expected to meet good support at $1,558 an ounce, analysts said, the low they fell to last week after the Federal Reserve disappointed gold bulls by failing to unveil another round of bullion-friendly quantitative easing.
"Unfortunately we are in a situation when you get debate on debate (on Europe), but no real material change," Deutsche Bank analyst Daniel Brebner said.
"We're in a bit of a period over the summer when we are going to see very little meaningful action by policymakers in three key regions - Europe, the US and China - and I suspect we will have a continued deterioration in economic indicators. That means pressures in the gold market will continue to mount."
"I don't think there's any kind of catalyst near term for a significant rebound in gold prices," he added. "That said, I think we'll continue to see very steady buying by central banks, which have been in the market for the last couple of quarters or so. That should help gold prices from weakening too much."
Turkey, Russia, Kazakhstan and Ukraine were among the latest central banks to raise gold reserves, lifting their holdings by more than 25 tonnes between them in May, IMF data showed on Tuesday.
Elevated risk aversion which benefited the dollar and weighed on other assets like base metals and crude oil also pressured gold on Wednesday. The euro fell 0.1 per cent against the US unit.
The metal has moved in line with 'risky' assets like oil and equities this year, and against the dollar, a perceived safe haven, reversing its previous pattern of responding positively to heightened fears over the euro zone crisis.
