* Euro hits two-month low vs dollar after Greece talks
* Uncertainty over approaching U.S. 'fiscal cliff' remains
* Platinum market set to swing into deficit this year
By David Brough
LONDON, Nov 13 Gold eased for a second day on
Tuesday, tracking losses in stocks and other commodities as
worries over the euro zone's handling of its debt crisis knocked
the euro to a two-month low against the dollar.
Appetite for European assets wilted as a dispute between
international lenders threatened to further delay an aid payment
Gold, traditionally hurt by gains in the dollar that
make it more expensive to buy in other currencies, was down 0.1
percent to $1,726.24 an ounce by 1136 GMT, while U.S. gold
futures for December were down $4.30 an ounce to
The euro came under further pressure after a German survey
of economic sentiment came in much worse than expected,
suggesting worries over the wider euro zone were starting to
affect the bloc's biggest economy.
Traders say the positive impact of Europe's debt crisis on
the dollar has offset the impact of any new appetite for gold as
a safe haven after a year which saw the metal fall prey to more
"There had been a decoupling in the relationship between
gold and the dollar in terms of the daily trading range, and now
we are seeing a readjustment," said Bayram Dincer, analyst with
LGT Capital Management.
In the longer term, traders said gold may benefit from
uncertainty over the looming "fiscal cliff" in the United States
which could see nearly $600 billion worth of spending cuts and
tax increases at the end of this year push the U.S. economy back
The precious metal hit a record $1,920.30 an ounce last
September when negotiations between Democrats and Republicans
over the raising of the U.S. debt ceiling turned sour.
However, signs that negotiations may be more constructive
this time around are starting to dampen some interest in one of
the assets investors favour as a safe haven in difficult
economic times. Gains earlier this month were largely made on
the back of expectations that talks would be protracted and
"Gold's rally may be starting to show signs of topping out,
as investors seem to be discounting the possibility of a fiscal
cliff deal being reached," INTL FCStone said in a note.
"However, we still have a long way to go before all the
sides agree, which means that we could see further gains in the
precious metals space before a more concerted sell-off sets in,
likely by early December."
Delegates at this year's London Bullion Market Association
conference in Hong Kong, who forecast gold prices would be
around $1,843 an ounce at the time of next year's meeting, have
adopted a softer tone towards gold than in previous years.
"This year I sensed that the bullishness has moderated and
there is less conviction," Tom Kendall, head of precious metals
research at Credit Suisse, told Reuters at the event.
Growth in Chinese demand for gold, which had surged in the
last five years to put China ahead of India as the world's
largest consumer, has shown signs of cooling this year.
Gold demand in India has been forecast to fall up to 45
percent this year on the back of rupee weakness, high prices and
a hike in import duties, but is set to recover in 2013, industry
officials said at the meet.
Among other precious metals, silver was little
changed at $32.42 an ounce. Spot platinum was up 1.2
percent at $1,579.25 an ounce, while palladium was up 1.3
percent at $612.97 an ounce.
Supply outages in South Africa are set to push the platinum
market into deficit this year as shipments from the world's main
producer of the metal fall by 605,000 ounces, refiner Johnson
Matthey said on Tuesday.
Chinese platinum jewellery demand was forecast to jump in
2012 as Hong Kong retailers added outlets, while palladium
jewellery demand was expected to fall by a fifth in China.
But pent-up demand for new vehicles and cheap car financing
rates will likely result in increased use of palladium in North
American autocatalyst production this year.