Gold gains in Europe

Gold gained on Monday as the euro strengthened and the precious metal remained supported by eurozone debt woes after ministers delayed a decision on emergency loans to Greece. Euro zone finance ministers kept up intense pressure on Greece, saying it had to approve tougher austerity measures before a final decision is made on a further 12 billion euros in loans.
Spot gold was at $1,544.44 by 1340 GMT compared with $1,538.40 an ounce late in New York on Friday. It hit a lifetime high around $1,575 in early May. "You're not going to get too much movement either way until we get more clarification as to what happens on Greece," Credit Agricole analyst Robin Bhar said. "The market is hungry for an actual agreement to be signed, sealed and dusted."
Gold gained as the euro trimmed losses against the dollar. The common currency hit session highs as it gained positive momentum after comments by the chief of the European Financial Stability Facility that the fund's guarantees will be raised to 780 billion euros from 440 billion. Investors await the US Fed's Open Market Committee's announcement on interest rates on June 22, which could squeeze the dollar.
Financial markets are bracing for the conclusion at the end of June of the Fed's quantitative easing, a cheap-money policy credited with boosting stocks but blamed for sky-high commodities prices and a weak dollar. "Investors will be trying to see how far or how high the bar for the next round of quantitative easing will be. If this bar is actually lowered, then I think it will be beneficial for gold," said Ong Yi Ling, investment analyst at Phillip Futures.
"If it is high, then I think gold will still remain in its current range bounds that we are seeing. I don't think they will do QE3 now." Gold priced in sterling hit a record high at 954.63 pounds, tracking early gains in spot gold. Recent gains in gold were driven by debt problems in Europe, inflation fears in China following strong economic data and worries about a US economic slowdown.
The International Monetary Fund cut its forecast for US economic growth and warned Washington and debt-ridden European countries that they are "playing with fire" unless they take immediate steps to reduce their budget deficits. Money managers cut their bullish bets in COMEX gold futures and options after raising them in the past three weeks, as bullion prices fell during the period, futures regulator Commodity Futures Trading Commission data showed.
Jewellers in Indonesia have started making inquiries ahead of the fasting month of Ramazan, and jewellers in Hong Kong are happy to buy on dips but volatile bullion prices have scared off investors in Japan, dealers said on Monday. Silver reversed losses and was at $36.03 an ounce from $35.80, below a record at $49.51 an ounce in April.
Platinum hit its lowest since end-March at $1,721.10 an ounce. It later was at $1,729.74 from $1,750.65 an ounce. Palladium, which has been losing ground in the last few sessions, was at $742.25 an ounce after hitting a four-week low at $729.73. "Silver prices have struggled to gain traction in the absence of physical demand and weak overall investor interest while demand concerns continue to weigh on the PGMs," Barclays Capital said in a note.