Gold Steady as Euro Zone Crisis Seen to Linger

By: Reuters

Gold held steady near a record high on Wednesday after a Franco-German summit failed to convince investors that the euro zone debt crisis would be solved effectively, supporting safe-haven demand for bullion. 

Jack Vearey | Getty Images

Spot gold [XAU=  1786.24    -0.01  (0%)   ] was little changed at $1,785.44 an ounce by 0019 GMT, after rising 1 percent in the previous session after the summit. It is just 1.6 percent below the record high above $1,813 struck last week.

U.S. gold [GCCV1  1788.00    3.00  (+0.17%)   ]edged up 0.2 percent to $1,788.60. 

French President Nicolas Sarkozy and German Chancellor Angela Merkel unveiled far-reaching plans for closer euro zone integration, but stopped short of increasing the bloc's rescue fund and said joint euro bonds may be a long-term solution.

Adding to investors' anxiety, the euro zone economy slowed sharply in the second quarter, hobbled by sluggish growth in Germany and stagnation in France.

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Holdings of the SPDR Gold Trust [GLD  173.92    2.12  (+1.23%)   ], the world's largest gold-backed exchange-traded fund, edged up 0.2 percent from a day earlier to 1,262.899 metric tons by Aug. 16.
     
U.S. stocks fell on Tuesday after three days of gains on the back of the disappointing Franco-German summit.

The euro struggled to make any headway in Asia on Wednesday, having suffered a minor setback on a lack of progress in talk of a common bond, while the Swiss franc stayed under pressure on expectations of imminent action to curb its strength.

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