Gold advances on European debt concerns

The yellow metal rose on Tuesday trading as European debt crisis boosted demand on the metal as a safe haven asset.

Spot gold is traded at $1366.80 an ounce after recording a high of $1367.24 and a low of $1360.47.

The previous session, gold shed $0.30 or 0.02% to close at $1373.42, while gold price was setin London at $1360.50 per ounce inclining from $1357.50 during the AM fixing.

Last year, the European debt woes pushed up gold prices by 30%, thereby with the continuation of that scenario this year gold prices may remain high.

Yesterday, European Finance chiefs in their first day meeting in Brussels said they are not under pressure to undertake immediate procedures to ease debt woes, but they vowed to increase safety for debt-laden economies through discussing the possibility of expanding the 750 billion-euro package and cheaper emergency loans.

The European common currency rebounded today against the dollar while yesterday bond yields and cost of insuring against default in highly indebted nations dropped, while last week, the successful auctions from Portugal, Spain and Italy managed to restore confidence in markets.

Today, eyes will be on Zew survey report in the euro zone and Germany and inflation data in the UK.

On the other hand, the dollar fell against a basket of major currencies, as depicted by the dollar index which slipped to a low of 78.94 from the day's opening level at 79.32, before a housing starts report due tomorrow which is expected to show decline. The dollar's slid also gave the chance for oil to rise above $91.00 a barrel.

Among other precious metals, platinum inched up to $1815.00 from the day's opening at $1813.00, palladium surged to $801.20 from $791.50 and silver soared to $28.54 from $28.32, as of 08:15 GMT.