* Worries over euro zone debt weigh on euro
* German deputy finmin says euro risks losing credibility
* Asian physical buying picks up after price retreat
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 27 Gold prices eased on Monday,
briefly touching near six-week lows in early trade, as the euro
suffered from concerns over the outlook for euro zone debt, and
amid broad-based selling of commodities.
Spot gold was bid at $1,495.06 an ounce at 1338 GMT,
against $1,499.53 late in New York on Friday. U.S. gold futures
for August delivery GCv1 fell $4.70 an ounce to $1,496.20.
Simmering worries over this week's Greek parliamentary vote
on austerity measures and its impact on a European Union bailout
package are pressuring the euro lower versus the dollar. A
stronger dollar tends to weigh on dollar-priced assets.
"Having discounted all the current market fundamentals, gold
seems to be waiting for fresh market cues for the immediate
move," said Pradeep Unni, senior analyst at Richcomm Global
"Technically charts are pointing at further weakness and
this is reflected by the excessive strength portrayed by the
U.S. dollar over the last couple of days," he added. "Oil under
$90 a barrel could further bearishness to the market."
Gold fell as low as $1,490.90 an ounce in early trade as oil
and industrial metals extended last week's hefty drop. U.S.
crude oil futures fell towards $90 a barrel after the
International Energy Agency said it would release emergency
reserves, and copper, lead and nickel prices also slipped.
Commodities have come under pressure from gains in the
dollar and concerns that euro zone debt problems could cause
further ructions in the currency markets.
The euro fell after Moody's said Greek banks have lost about
8 percent of their private-sector customer deposits so far this
year. The ratings agency warned that those institutions would
face severe cash shortage if outflows mount to 35 percent of
A Greek minister warned on Monday of "catastrophe" if
parliament blocked a 28 billion-euro ($40 billion) package of
tax increases and spending cuts in a parliamentary ballot
expected on Wednesday.
Germany's deputy finance minister said on Monday the euro is
in danger of losing credibility.
COMMODITIES SOLD HEAVILY
Worries over sovereign risk contagion on the euro zone were
a key factor pushing gold prices to record highs earlier this
year, though they were not enough to prevent the precious metal
being caught up in heavy selling of commodities last week.
"We do not expect the price to retreat much further,"
Commerzbank said in a note. "This week sees the debate and vote
on the austerity measures in Greece, with ratification a
condition for additional financial support. It is still
uncertain whether parliament will give its approval."
Money managers raised bullish bets in COMEX gold futures and
options to the highest level since the week of April 24 in the
week ended June 21, as bullion climbed to within $20 of its
record, data from the Commodity Futures Trading Commission
showed on Friday.
Speculators in silver futures and options also upped their
net long positions, as safe-haven demand for precious metals
grew in response to disappointing economic data from the United
States and persistent concerns surrounding Europe's debt crisis.
Physical gold demand, especially from Asian buyers, picked
up as prices fell towards multi-month lows, but this is unlikely
to put the brakes on gold's correction for long, traders said.
"There has been good demand on the dips and I think that
will continue, but that is not going to be enough ion its own
right, if people are in liquidation mode, to reverse a downward
trend," said Simon Weeks, head of precious metals at the Bank of
Silver was bid at $33.63 an ounce against $34.26,
reflecting losses in other industrial metals. Platinum
was at $1,671.49 an ounce against $1,672.99, and palladium
at $718.47 against $726.80.
(Reporting by Jan Harvey)