Gold holding steady as Europe debt deal eyed

Spot gold prices held steady on Monday, after European leaders moved closer to a concrete plan to solve eurozone's debt crisis during a weekend meeting, lifting sentiment in commodities and equities. Gold prices have followed moves in riskier assets in recent weeks, with its safe-haven appeal diminishing after wild price swings in the past two months. European Union leaders made some progress towards a strategy to fight the eurozone's sovereign debt crisis on Sunday, but the final decision was deferred until a second summit on Wednesday. "There is cautious optimism over the euro zone debt issue and some hope that policymakers will be able to contain it," said Ong Yi Ling, an analyst at Phillip Futures in Singapore. "If policymakers do deliver on Wednesday, we will see a rally in risk, and gold will benefit as well." Spot gold edged up 0.1 percent to $1,642.15 an ounce by 0303 GMT, after posting its biggest weekly fall last week with a drop of more than 2 percent. US gold gained half a percent to $1,644 an ounce. Technical analysis suggested spot gold could fall to $1,602.74 during the day, said Reuters market analyst Wang Tao.