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Gold futures ease off record high as EU summit eyed

Published 07/19/2011, 10:30 AM
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Investing.com – Gold futures erased gains on Tuesday, pulling back from a record high as some mild profit taking emerged and as fears over the euro zone’s debt crisis eased ahead of an emergency summit of euro zone leaders later in the week.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,600.55 a troy ounce during U.S. morning trade, edging 0.35% lower.                 

Earlier in the day, gold prices rose to a record high USD1,610.35 an ounce as the safe haven appeal of the precious metal was boosted amid sovereign debt concerns in the U.S. and euro zone. 

However, the rally prompted some investors to sell their position on profit taking and lock in gains.

Meanwhile, yields on Italian and Spanish government bonds retreated slightly after rising to record levels in the previous session amid fears over sovereign debt contagion.

Greek Finance Minister Evangelos Venizelos said that a resolution to the country’s debt woes was “attainable” and that Greece faced "no danger of bankruptcy".

Euro zone finance ministers were to meet on Thursday to focus on “the financial stability of the euro area as a whole and the future financing of the Greek program,” according to the president of the European Council, Herman Van Rompuy.

Prices remained supported amid weakness in the U.S. dollar. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.44% to trade at 75.36, the lowest since July 14.

Elsewhere, silver for September delivery declined 0.4% to trade at USD40.35 a troy ounce, after rising earlier to a ten-week high of USD40.88.

Silver prices have rallied nearly 16% in July as investors sought a cheaper alternative to gold.

Global financial service provider UBS said earlier that silver was “clearly benefiting from its greater affordability, attracting investors who are keen on hard assets during these uncertain times.”

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