"Handshake across the Himalayas"
India and China will study new ways to ease tensions along their ill-defined border, Chinese Premier Li Keqiang said on Monday in his first foreign trip since taking office, which comes just weeks after a military stand-off between the Asian giants in the Himalayas. Full Article | Slideshow
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Gold edges up on euro zone fears, dollar limits gains
NEW YORK |
NEW YORK (Reuters) - Gold edged up on Tuesday, outperforming equities for the second day in a row as worried investors bought the precious metal as a safe haven after European Union officials predicted Greece will need more debt restructuring.
Gold prices seesawed early, then reversed losses as EU officials said Greece probably will not be able to pay its debts, making further restructuring necessary.
Bullion's gains were limited, and gold futures slightly lower as the euro fell against the U.S. dollar. Europe's private sector looked set for a prolonged slump after surveys showed the downturn that began in the euro zone's small economies was now entrenched in Germany and France.
"Gold is mostly taking its cues from the euro-dollar. Volume is pretty decent, suggesting there are good underlying bids here," said Jonathan Jossen, an independent COMEX gold options floor trader.
Dealers said the euro-dollar move has taken the lead role in dictating day-to-day moves in gold, as impetus from central-bank monetary policy announcements and the physical markets petered out.
Spot gold was up 0.1 percent at $1,577.86 an ounce by 3:04 p.m. EDT (1904 GMT), moving in a relatively quiet range of less than $20.
U.S. COMEX August gold futures for August delivery settled down $1.20 at $1,576.20, with trading volume about 15 percent above its 30-day average, preliminary Reuters data showed.
A 1 percent drop in the S&P .SPX and tumbling grain prices after the previous session's record rally also capped further gains in gold. U.S. Treasuries bond yields fell to a new low on safety buying. .N <GRA/> <US/>
More evidence of a slowing U.S. economy weighed on the financial markets. The U.S. Richmond Federal Reserve Bank's monthly manufacturing composite index in July fell to its weakest reading since April 2009. <ID:TAR001673>
COMEX OPTION EXPIRY EYED
COMEX floor trader Jossen said that bullish options strategies such as butterfly spreads were traded at higher strike prices such as $1,900 and $2,200 an ounce.
TD Bank said in a note that open interest for COMEX August options was concentrated around the round-number strike prices including $1,600, $1,550 and $1,650, and that would likely keep gold moves muted. The August options are expiring on Thursday.
"Traders have become more tentative and are quicker to take profits when the opportunity presents itself," said Michael Daly, precious metals analyst at futures brokerage Ironbeam.
Daly said that volatility in precious metals will rise on euro zone debt worries and heightened tensions in the Middle East.
Among other metals, silver edged down 0.4 percent to $26.89 an ounce, while spot platinum was down 0.7 percent at $1,382.24 an ounce and spot palladium dropped 1 percent to $560.75 an ounce.
Palladium hit a 2012 low at $551.68 as economic worries hurt the metal mostly consumed as catalytic converters by the auto industry.
(Additional reporting by Jan Harvey in London; Editing by Steve Orlofsky and David Gregorio)
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