May 30, 2012 / 3:57 AM / 6 years ago

PRECIOUS-Gold hits one-week low on euro weakness

* Euro hits two-year low on Spain worries
    * Spot gold may drop to $1,533.41/oz-technicals
 
    * Coming up: Euro zone economic sentiment, May; 0900 GMT

 (Updates prices)	
    By Rujun Shen	
    SINGAPORE, May 30 (Reuters) - Gold dipped to a one-week low
on Wednesday, tracking a weaker euro on heightened worries about
the euro zone debt crisis as Spain's borrowing costs spiralled
towards unsustainable levels.	
    Gold has recently been moving in lockstep with the single
currency, which fell to its lowest level against the dollar in
two years as investors continue to fret about Spain's vulnerable
fiscal conditions.   	
    "Continuous weakness in other currencies and strength in the
dollar have kept gold, precious metals and commodities generally
depressed," said Jeremy Friesen, commodity strategist at Societe
Generale in Hong Kong.	
    Spot gold fell as much as 0.6 percent to $1,544.74 an
ounce earlier in the day, and later recovered some losses to
trade at $1,550.54 by 0634 GMT. Prices are poised for a monthly
loss of nearly 7 percent and a fourth month of decline.	
    U.S. gold was little changed at $1,550.	
    Investors are waiting for central banks to respond with more
monetary measures to help shore up the economies, which would
help keep funding costs low and raise the inflationary outlook -
factors that will benefit gold, he said.	
    But political uncertainty in Greece will keep investors on
edge for now. Though pro-bailout conservatives have topped
recent opinion polls, analysts said the vote on the June 17
elections was still too close to call. 	
    "Policymakers are waiting for clear commitments from some of
the peripheral countries before they allow accommodation to
support growth," Friesen added.	
    Until the market is convinced of that intention, gold could
remain in a directionless drift.    
    	
    Dealers reported light buying in Asia's physical market, but
most buyers remained on the sidelines of the market awaiting
cues on price direction.	
    "At this stage we've only got enquiries, and buyers are
probably eyeing $1,530, which has been a support level
recently," said a Singapore-based dealer.	
    Purchases by India, one of the world's top gold consumers,
have been dented by the country's weak currency and buying is
likely to stay muted until the monsoon season ends in
September.         	
    Among other precious metals, spot silver lost 0.2
percent to $27.76, on course for its third consecutive session
of losses.	
    Holdings of the iShares Silver Trust, the world's
largest silver-backed exchange-traded fund, dropped nearly half
a percent from the previous session to 9,619.03 tonnes by May
29, the lowest in nearly two weeks. 	
	
   Precious metals prices 0634 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1550.54   -4.00   -0.26     -0.85
  Spot Silver        27.76   -0.06   -0.22      0.25
  Spot Platinum    1412.24  -12.91   -0.91      1.38
  Spot Palladium    602.25    1.13   +0.19     -7.70
  COMEX GOLD JUN2  1550.00    1.30   +0.08     -1.07         7860
  COMEX SILVER JUL2  27.73   -0.06   -0.22     -0.66         3553
  Euro/Dollar       1.2473
  Dollar/Yen         79.44
  COMEX gold and silver contracts show the most active months

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