Gold rises as Italy vote uncertainty boosts safe-haven appeal

SINGAPORE Tue Feb 26, 2013 6:42am IST

A craftsman makes a gold ornament in Qionghai, Hainan province, February 21, 2013. REUTERS/China Daily

A craftsman makes a gold ornament in Qionghai, Hainan province, February 21, 2013.

Credit: Reuters/China Daily

Related Topics

SINGAPORE (Reuters) - Spot gold inched up on Tuesday, extending gains from the previous session as uncertainty over Italy's election results stoked fears of a resurgent euro zone debt crisis, boosting bullion's appeal as a safe-haven investment.

FUNDAMENTALS

* Spot gold had edged up 0.1 percent to $1,595.41 an ounce by 0034 GMT, extending gains into the fourth straight session.

* U.S. gold was up half a percent at $1,595.10.

* Election projections show that no party is likely to win a majority in the upper house of Italy's Senate, fuelling worries about revived political uncertainty in the euro zone's third-largest economy, which could reignite the debt crisis.

* Investors will closely watch U.S. Federal Reserve Chairman Ben Bernanke's testimony to Congress on Tuesday and Wednesday, to seek clues on the Fed's attitude on its monetary policy.

* Likely government budget cuts and the prospect for messy political fights over fiscal policy will weigh on the U.S. economy this year and hold growth to a tepid 2.4 percent, according to a survey of forecasters published on Monday.

* Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 7.83 tonnes, or 0.61 percent, to 1,272.848 tonnes on Feb 25, the lowest since August 2012.

MARKET NEWS

* U.S. stocks on Monday suffered their biggest drop since November after the strong showing in Italian elections by groups opposed to the country's economic reforms.

* The euro crouched near a six-week low against the dollar while the yen kept some distance from multi-month lows on Tuesday. <USD/>

(Reporting by Rujun Shen; Editing by Joseph Radford)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Article 

Indians in Iraq

Indians in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Test Match Postponed

Test Match Postponed

First test against India postponed after death of Hughes  Full Article | Related Story 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Banking Sector

Banking Sector

After record deal, more India bank takeovers on cards  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Nigeria Violence

Nigeria Violence

Bombs, gunfire kill 81 at crowded mosque in Nigeria's Kano  Full Article 

Movie Review

Movie Review

D’Silva's “Ungli” just skims the surface  Full Article | Related Story 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage