Gold eases after failing to breach $1,600 an ounce
NEW YORK (Reuters) - Gold prices slipped on Monday after early buying failed to lift prices past $1,600 an ounce, with investors still cautious about the precious metal as they awaited clearer signals on the euro-zone debt crisis.
Last week, gold slid to its lowest level since December, then rallied 4.5 percent late in the week. Buying resumed early on Monday but ran out of steam, as mild technical selling set in around the session high of $1,599 an ounce -- gold's priciest level in a week and a half.
Spot gold was down 0.08 percent at $1,590.80 an ounce at 3:43 p.m. EDT (1910 GMT), while U.S. gold futures for June delivery settled at $1,588.70 per ounce, down 0.2 percent from Friday.
A close above $1,605 an ounce would trigger significant buying, traders said, but after last week's tumultuous trading, most investors are content to just buy the dips for now.
The precious metal remains poised for a rebound after touching a triple bottom last week on the technical charts, said Ralph Preston, futures analyst at HeritageWest Futures in San Diego, California.
Last week, gold fell to its lowest this year at $1,527 an ounce, before staging its biggest two-day rally since October as traders holding short positions rushed to cover.
Simmering concerns about the euro zone debt crisis have stoked some demand for physical metal as a safe store of value in Europe, dealers said, but bad news from the euro zone also largely weighs on gold via its impact on the currency markets.
On Monday, gold did not track the euro, which staged its own technical rebound against the dollar after falling to four-month lows late last week. <FRX/>
But gold remains vulnerable to gains in the dollar, which makes the metal more expensive for other currency holders. Physical buyers in key consumer India have also been reluctant.
Any recovery in the euro was expected to be short-lived as worries about Greece persisted even after world leaders at a weekend meeting expressed support for Athens to stay in the euro.
EURO ZONE TALKS
A deterioration in the crisis over the past few weeks and increasing uncertainty whether Greece will stay in the euro zone prompted talk that French President Francois Hollande and other euro zone leaders will promote the idea of mutualised European debt at an informal summit in Brussels on Wednesday.
The proposal is likely to meet with entrenched opposition from European paymaster Germany.
Gold's performance "really all depends on whether (its) new found rally can stand up to what I think will be weakness in the euro over the coming days," Marex Spectron said in a note.
On Friday, data released in the United States showed hedge funds and other money managers liquidated more than $2 billion in U.S. gold futures over a week, before a forceful rebound in the metal potentially tripped up some of them.
Silver was down 0.91 percent at $28.37 an ounce, while spot platinum was up 0.61 percent at $1,458.85 an ounce and spot palladium was up 2.03 percent at $610.47 an ounce.
Both platinum group metals posted modest losses last week as jewelers, miners, refiners and recyclers met in London for Platinum Week.
"London Platinum Week rammed home the need for some form of short- to medium-term production restraint in the face of weak PGM prices," RBS said in a note on Monday.
"None of the producers we met up with had any doubt about the positive platinum and palladium demand picture in the years ahead. Of more concern was what to do short term to put a bridge across the current, mainly externally driven price woes."
(Additional reporting by Jan Harvey in London; Editing by David Gregorio)
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