By: Reuters
Fears about a Greek default rose after senior politicians in German Chancellor Angela Merkel's center-right coalition started talking openly about it following Juergen Stark's surprise departure at the European Central Bank last week.
Spot gold [XAU= 1848.1899
-8.97 (-0.48%) 
]eased $8.87 to $1,848.29 an ounce by 0233 GMT, well below a lifetime high around $1,920 struck last week, with speculators still cashing in on the metal to cover losses in equities.
"Strength in the dollar is weighing on gold. I think perhaps some investors are also concerned about the extreme volatility in gold," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
"So (there is) some short-term profit taking before the longer-term uptrend may continue. If gold comes down further to about $1,800 level, I think we could see some buyers coming back to the market."
U.S. gold [GCCV1 1849.40 -10.10 (-0.54%) ] fell $7.1 to $1,852.4 an ounce.
But gold priced in euro struck a record at 1,371.30 euros as the single currency fell against the U.S. dollar on Europe's debt crisis — a factor which had initially lifted cash gold to a record.
The euro fell to six-month lows against the dollar as more negative news flow from Europe hit already shaky sentiment, and markets are also bracing for possible ratings downgrades on France's top banks, as well as Italy's sovereign rating.
The uncertainties about global economic growth have driven gold prices to record highs since July, and are expected to underpin sentiment for the metal until investors are convinced the danger of recession is past.
The physical sector saw bargain hunting from jewelers in Indonesia and Thailand, keeping premiums for gold bars steady.
Gold fell further on Monday after posting its worst closing since June last week but bargain hunters could cushion the fall, while escalating worries about Europe's ability to resolve its debt crisis sent bullion-priced in euro to record.
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AP |
Spot gold [XAU= 1848.1899
-8.97 (-0.48%) ]eased $8.87 to $1,848.29 an ounce by 0233 GMT, well below a lifetime high around $1,920 struck last week, with speculators still cashing in on the metal to cover losses in equities. "Strength in the dollar is weighing on gold. I think perhaps some investors are also concerned about the extreme volatility in gold," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.
"So (there is) some short-term profit taking before the longer-term uptrend may continue. If gold comes down further to about $1,800 level, I think we could see some buyers coming back to the market."
U.S. gold [GCCV1 1849.40
-10.10 (-0.54%) ] fell $7.1 to $1,852.4 an ounce. But gold priced in euro struck a record at 1,371.30 euros as the single currency fell against the U.S. dollar on Europe's debt crisis — a factor which had initially lifted cash gold to a record.
The euro fell to six-month lows against the dollar as more negative news flow from Europe hit already shaky sentiment, and markets are also bracing for possible ratings downgrades on France's top banks, as well as Italy's sovereign rating.
The uncertainties about global economic growth have driven gold prices to record highs since July, and are expected to underpin sentiment for the metal until investors are convinced the danger of recession is past.
The physical sector saw bargain hunting from jewelers in Indonesia and Thailand, keeping premiums for gold bars steady.
"The interest is there. Most jewelers in Indonesia are back to work after the Muslim holiday. The wedding season is coming up in India, so their demand should pick up," said a dealer in Singapore.
Buying is expected to pick up in top consumer India, where the wedding season, traditionally the period of greatest bullion demand, gets under way in September.
Gold demand, which dropped in the second quarter of this year, is expected to strengthen by the end of 2011, driven by robust jewelry buying in India and China and recovery in investment demand, senior World Gold Council officials said.
Buying is expected to pick up in top consumer India, where the wedding season, traditionally the period of greatest bullion demand, gets under way in September.
Gold demand, which dropped in the second quarter of this year, is expected to strengthen by the end of 2011, driven by robust jewelry buying in India and China and recovery in investment demand, senior World Gold Council officials said.
"For today, there is little market moving economic data scheduled for release. The focus of financial markets and gold could remain on the Eurozone debt crisis," said Ong of Phillip Futures.
"Later this week, we are seeing quite a bit of economic data: retail sales, industrial output etc."
In the energy market, oil fell by more than $1 on Monday with a stronger dollar as investors shunned commodity risk because of Europe's deepening sovereign debt crisis, while economic gloom dampened the outlook for energy use.
"Later this week, we are seeing quite a bit of economic data: retail sales, industrial output etc."
In the energy market, oil fell by more than $1 on Monday with a stronger dollar as investors shunned commodity risk because of Europe's deepening sovereign debt crisis, while economic gloom dampened the outlook for energy use.
Copyright 2011 Thomson Reuters. Click for restrictions.
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