Gold fell on Tuesday and assets seen as higher risk like stocks and industrial commodities rose on hopes eurozone officials are making progress on a package of measures to resolve the region's debt crisis. Gold recovered from earlier lows below $1,210 an ounce, however, as investors' interest remained piqued by the prospect of further sovereign debt problems in the eurozone.
-- Platinum Week enters second day in London
Spot gold was bid at $1,216.55 an ounce at 1422 GMT, against $1,223.00 late in New York on Monday. US gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $11.10 to $1,217.00 an ounce. Concerns that the fiscal problems of debt-laden Greece would occur elsewhere in the eurozone drove gold to a record $1,248.95 an ounce last week and knocked other assets.
But investors were cheered by news that aid for Greece was arriving as planned, after officials said the country received a 14.5 billion euro emergency loan from the EU and would use some of the money to repay an 8.5 billion euro bond. "The fact that Greece has actually received some of the aid package has probably taken some heat out of the market, but we still have to see if the aid is a cure, or just a temporary sticking plaster," said Societe Generale analyst David Wilson.
Investment demand for gold remained high, with holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, rising just over three tonnes on Monday to a record 1,217.108 tonnes. Among other precious metals, silver rose to $18.96 from $18.75 an ounce. Platinum was at $1,689.50 an ounce against $1,666, and palladium at $506.50 against $504.
London's Platinum Week entered its second day on Tuesday, with analysts, traders, refiners and recyclers meeting in the British capital to discuss industry developments. Refiner Johnson Matthey initiated proceedings on Monday with the release of its Platinum 2010 report, in which it said it expects the market to move closer to balance this year after swinging into a surplus of 285,000 ounces last year.
Platinum and palladium encountered heavy selling on Monday along with other industrial metals, but have since regained some lost ground. "Although we would not rule out a deeper price correction in the near term, particularly if investment softens further, we maintain a positive bias towards both metals given our expectations for auto and industrial demand to rebound and strong physical investor appetite," Barclays said in a note.