LONDON: Gold steadied on Monday as investors still wary after last week’s price drop sold the metal above $1,600 an ounce, erasing gains it made on the back of a surge in the euro after European ministers agreed a $125 billion deal to aid Spanish banks.

Other precious metals outperformed, meanwhile, on hopes a solution to the eurozone debt crisis may emerge. Platinum and palladium were the biggest risers, while silver prices were also up more than 1 percent. Spot gold was little changed at $1,592.80 an ounce at 1124 GMT, having earlier touched a high of $1,607.95. US gold futures for August delivery were up $1.90 an ounce at $1,593.30.

Subsiding risk aversion lifted European equities, but Spanish government bond yields turned flat on the day, reversing an earlier fall, as relief after the country secured a banking bailout proved to be short-lived. Other commodities climbed, with oil prices up around 70 cents a barrel as the news on Spanish banks allayed fears demand would falter, and base metals like copper and aluminium rose.

The euro rose after Spain secured aid for its banks, allaying some of the concerns about the country’s debt problems, but the currency’s gains were seen limited as investors were cautious ahead of elections in Greece at the weekend.

Any fresh strength in the dollar could pressure gold.

Among other precious metals, silver was up 0.5 percent at $28.62 an ounce, tracking gains in the broader commodities market. Spot platinum was up 1.1 percent at $1,437.83 an ounce, while spot palladium was up 1.3 percent at $617.25 an ounce.

The gold/platinum ratio, which measures the number of platinum ounces needed to buy an ounce of gold, retreated from near five-month highs as platinum outperformed, while the spread narrowed to $150 an ounce from nearly $200 an ounce last week. reuters

Source: http://www.dailytimes.com.pk/default.asp?page=2012\06\12\story_12-6-2012_pg5_30