Gold prices traded steady on Monday, after posting their sharpest weekly rise in more than a month, as the eurozone kicks off a week packed with meetings and decisions crucial to a solution to its debt crisis as well as the euro. Spot gold was little changed at $1,744.95 an ounce by 0655 GMT, after rising nearly 4 percent in the previous week.
US gold edged down 0.1 percent to $1,749.10. Gold has the potential to move higher in the short term after trading in a tight range around $1,750 in the past few sessions, riding on optimism ahead of the summit, but the rise may be stemmed at the key resistance level at $1,800, Li added.
The two-year-old debt crisis has not only pushed a few eurozone nations to the brink of bankruptcy, but also threatened to split the single currency bloc and sink the global economy. In a sign that the global economy is slowing, the latest data showed China's services sector cooled in November to its weakest growth in three months. "We've witnessed a number of EU summits trying to tackle the problem, but none of them has been particularly effective," said Li Ning, an analyst at Shanghai CIFCO Futures.
After China published data showing its vast manufacturing sector shrank in November, an HSBC purchasing managers' index showed the world's second-largest economy slowing quickly and in need of policy support. "Easing monetary policy may suggest that the government is comfortable with the current rate of inflation, which is negative for gold," said a Singapore-based trader.
Managed money cut its net long positions in US gold futures and options for a second consecutive week in the week ended November 29. The total open interest fell to its lowest in 10 months, suggesting decreased liquidity and trading interest in the market. Spot palladium edged up 0.4 percent to $645 an ounce, extending a 14-percent rise from the previous week - its biggest one-week gain in more than three years.
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