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Gold inches up after two-day slide; firm dollar weighs

Source : REUTERS
Last Updated: Tue, Oct 09, 2012 04:41 hrs
Gold Bullion and coins from the American Precious Metals Exchange (APMEX) is seen in this picture taken in New York

Gold inched up on Tuesday, after two straight days of losses, but a strong dollar as a result of worries over the euro zone debt crisis is expected to keep bullion under pressure.

Holdings of gold-backed exchange-traded funds hit a record high on Monday, suggesting that investor interest in bullion remained strong.

FUNDAMENTALS

* Spot gold edged up 0.2 percent to $1,777.39 an ounce by 0027 GMT, rebounding from a one-week low of $1,766.14 hit on Monday. Gold fell almost 1 percent over the last two sessions, its sharpest two-day decline since August.

* U.S. gold also crawled up 0.2 percent to $1,779.50.

* Euro zone finance ministers and the International Monetary Fund held a "thorough and robust" debate on Greece on Monday, but failed to make significant progress in deciding how best to get the country back on track with its bailout programme.

* Meanwhile, Spain has not yet requested a bailout, though market participants said it is just a matter of time before Madrid asks for international aid.

* The outlook for the world's major economies including the United States and Germany has deteriorated slightly, although China may be stabilising after a recent slowdown, the OECD said on Monday.

* The World Bank cut its economic growth forecasts for the East Asia and Pacific region on Monday and said there was a risk the slowdown in China could worsen and last longer than many analysts have forecast.

* Concerns about the global economy, in addition to data from last Friday showing improving U.S. job market, lifted the dollar index from a two-week low hit last Friday.

* Holdings of gold ETFs rose to a historical high of 74.73 million ounces by October 7.

* South Africa's local government workers' union said on Monday it would launch a strike over pay in the next few days, the first sign of a wave of labour unrest in Africa's biggest economy spreading from the mines into the public sector.

* For the top stories on metals and other news, click, or

MARKET NEWS

* U.S. stocks slipped in light trading on Monday, pulling back from recent five-year highs ahead of an earnings season expected to be weak.

* The euro was little changed on Tuesday, after slipping from a two-week high against the dollar and yen in the previous session as worries about the euro zone debt crisis persisted.




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