Gold slumps on scepticism of EU meeting

Gold eased on Wednesday extending sharp losses made in the previous session as investors were sceptical that an informal European Union meeting later in the day would yield steps to help solve the region's debt crisis. Gold fell to as low as US$1,555.89 an ounce earlier in the day, its lowest level in nearly a week, tracking a weaker euro as investors fretted about the possibility of a Greek exit and its implications for the global economy. Investors will be watching the outcome from the EU summit, but confidence is on the wane since Germany and France are likely to confront each other on the idea of mutualised European debt. "Can it solve the debt crisis? No," said Dick Poon, manager of precious metals at Heraeus in Hong Kong, "Everyone is worried about Greece withdrawing from the euro zone and the global economy, and would rather keep cash on hand than buying anything." Gold has lost its safe haven appeal to the dollar, US. Treasuries and German Bund, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies. The dollar index hit its highest level since September 2010, on course for its fourth consecutive weekly rise, while the euro moved close to a four-month low against the greenback hit last week. Spot gold lost 0.6 percent to US$1,558.96 an ounce by 0333 GMT after falling 1.5 percent the previous day. US gold slumped 1.1 percent to US$1,558.90, after a 1.3 percent fall in the previous session. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell a hefty 1.4 percent to 1,265.43 tonnes by Tuesday, the lowest level in nearly four months and after failing to breach above US$1,600. Other precious metals weakened as well. Spot silver  dropped 1.2 percent to US$27.78, on course for its biggest daily decline in a week. "The stronger dollar is pressuring silver, even though the lower prices of the metal has lured back some buying from industrial users in Asia," said a Shanghai-based trader. Spot platinum lost 0.7 percent to US$1,428.94, extending a 1.5-percent dip in the previous session, despite rekindled supply concerns following operation disruption at the world's biggest platinum mine Rusternburg. Impala Platinum, the world's second-largest platinum producer, said it was losing 3,000 ounces a day as most workers were not reporting for duty at its Rustenburg mine because of fresh unrest between rival unions. From / Arabian Business