Gold steady below $1,720; Greek debt worries return

SINGAPORE |
Wed Nov 2, 2011 6:31am IST

SINGAPORE (Reuters) – Gold prices held steady below $1,720 on Wednesday, as rekindled worries about Greece’s debt crisis and a firm dollar put bullion under pressure, while safe-haven appetite is likely to support sentiment.

FUNDAMENTALS

* Spot gold edged down 0.1 percent to $1,716.79 an ounce by 0020 GMT.

* U.S. gold gained 0.4 percent to $1,718.90.

* Markets tumbled on Tuesday after Greece’s Prime Minister George Papandreou shocked the world by announcing plans to hold a referendum on the bailout plan, throwing hopes on solving Greece’s debt crisis into jeopardy.

* French President Nicolas Sarkozy and German Chancellor Angela Merkel will hold an emergency meeting with Greece on Wednesday to push for a quick implementation of Athens’ bailout deal, the “only solution” to its debt crisis, Sarkozy said on Tuesday.

* Eyes are on a news conference by the U.S. Federal Reserve chief Ben Bernanke later in the day after a two-day policy meeting. The Fed looks set to take a breather from monetary stimulus measures on Wednesday, even if financial market turbulence heightens the chances of action later.

* Manufacturing surveys on Tuesday from North America to debt-crisis-hit Europe to Asia painted a portrait of softening global demand, but analysts do not see a world recession in the cards.

* MF Global Holdings Ltd failed to protect customer accounts by keeping them separate from its own funds, said a top U.S. exchange regulator, another shock for commodity markets scrambling to contain fallout from the brokerage’s bankruptcy.

* U.S. silver rose as much as 2.3 percent to $33.50 before easing to $33.18.

MARKET NEWS

* U.S. stocks tumbled on Tuesday after investors were blindsided by a surprise call for a Greek referendum on an EU bailout plan, casting doubt on the sustainability of the recent market rally.

* The euro wallowed at three-week lows against the dollar early in Asia on Wednesday, having suffered its biggest two-day fall since May on uncertainty about the euro zone debt deal after Greece’s shock call for a referendum.

(Reporting by Rujun Shen; Editing by Himani Sarkar)

Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/Tb1gzwfcUz4/idINIndia-60259820111102

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