Gold prices rose on Friday along with the euro after leaders at a European Union summit struck a deal to cut borrowing costs for Spain and Italy, but stayed on track for their biggest quarterly drop in eight years after a dire performance in May and June. The metal has fallen 5.87 percent since the end of March, its worst quarter since the three months to June 2004, as the dollar benefited from safe-haven flows and hopes faded that the Federal Reserve would launch another round of U.S. quantitative easing. After a widely celebrated eleven-year bull run, which took gold prices to a record $1,920.30 an ounce last September, it is now little better than flat on the year and has averaged just over $1,650 an ounce in the first half. “After 11 years it is only natural that gold stops and pauses for breath before taking the next step higher,” Saxo Bank vice president Ole Hansen said. “The worry is obviously that momentum has been completely lost and leveraged players (such a hedge funds) have left the building.” “They will come back, but the market needs to reassert itself before that happens, as they are more followers than instigators of trends.” “The event that could trigger the spark that put some life back into gold is however difficult to find at the moment, so before we move higher, there is a risk that we need to clear the table which could be triggered by a move below $1,500.” Spot gold was up 1.3 percent at $1,570.20 an ounce at 1003 GMT, while U.S. gold futures for August delivery were up $20.20 an ounce at $1,570.60. Financial markets have rebounded strongly from Thursday’s losses. The Euro STOXX 50 volatility index, Europe’s main gauge of anxiety, sank 10 percent to a one-week low of 25.25 as investors’ appetite for risky assets recovered following a deal at the EU summit. Euro zone leaders agreed to take emergency action to bring down Italy’s and Spain’s spiralling borrowing costs and to create a single supervisory body for euro zone banks by the end of this year, a first step towards a European banking union. Sticking plaster European shares were up 1.5 pct, the euro was up 1 pct versus the dollar, and the cost of insuring Spanish and Italian debt against default slid. But analysts warned the bounce would likely be short-lived. “I’m afraid... this news.. is no more than a sticking plaster on an amputation, and as such while the markets will for the moment react favourably, in the long run we still have a long way to go,” Marex Spectron said in a note. Physical gold buying in major consumer India picked up a little on Friday as prices fell. Weakness in Indian demand has undermined spot prices this year, with Indian gold prices currently near record highs due to rupee weakness. Traders in India are waiting for monsoon rains to pick up, which is vital to farm productivity and profits. Rural areas contribute to about 60 percent of gold imports. Quarterly sales of gold American Eagle coins by the U.S. Mint also fell to their lowest in four years at 127,500 ounces, down more than 39 percent from the previous quarter and by more than half year-on-year. Among other precious metals, silver was up 1.8 percent at $26.82 an ounce. Its outperformance helped pull the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, back from its highs of the year to 58.5. Spot platinum was up 1.5 percent at $1,404.75 an ounce, while spot palladium was up 1.2 percent at $567.57 an ounce. Both metals have fallen to their lowest this year in recent days, at $1,378 and $556 respectively.