Spot gold inched up on Tuesday, extending gains from the previous session as uncertainty over Italy’s election results stoked fears of a resurgent euro zone debt crisis, boosting bullion’s appeal as a safe-haven investment.
FUNDAMENTALS
* Spot gold had edged up 0.1 percent to USD 1,595.41 an ounce by 0034 GMT, extending gains into the fourth straight session.
* US gold was up half a percent at USD 1,595.10.
* Election projections show that no party is likely to win a majority in the upper house of Italy’s Senate, fuelling worries about revived political uncertainty in the euro zone’s third-largest economy, which could reignite the debt crisis.
* Investors will closely watch US Federal Reserve Chairman Ben Bernanke’s testimony to Congress on Tuesday and Wednesday, to seek clues on the Fed’s attitude on its monetary policy.
* Likely government budget cuts and the prospect for messy political fights over fiscal policy will weigh on the US economy this year and hold growth to a tepid 2.4 percent, according to a survey of forecasters published on Monday.
* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped 7.83 tonnes, or 0.61 percent, to 1,272.848 tonnes on Feb 25, the lowest since August 2012.
MARKET NEWS
* US stocks on Monday suffered their biggest drop since November after the strong showing in Italian elections by groups opposed to the country’s economic reforms.
* The euro crouched near a six-week low against the dollar while the yen kept some distance from multi-month lows on Tuesday.
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