Gold braces for a weekly gain

The shiny metal little changed today, yet heading for a weekly gain, on turmoil in the MENA region and escalating debt woes in the euro area which reinforced demand on the metal as a safe haven asset.

The tensions are intensifying in Libya as well as other countries in the region which is giving a strong support to oil prices which is currently trading above $105 a barrel.

Accordingly, gold rose to a record high yesterday after touching a high of $1447.51 an ounce, while it currently trading at $1432.00.

Also, this month gold has benefited from the aftermath of the Japanese quake which raised concerns of having a nuclear catastrophe.

However, a strong boost came to gold prices at the end of the week after the rejection of Portuguese austerity budget by the opposition which resulted in the resignation of the Prime Minister and increase expectations that Portugal will accept a bailout.

S&P downgraded Portugal's credit rating after the rejection of the deficit-cut plan while Moody's downgraded rating of 30 Spanish banks.

Yesterday, European leaders agreed on their first day meeting yesterday to confirm the measures announced earlier this month to set terms for future bailout mechanism.

They agreed on the new 500 billion euros package, confirmed on expanding the lending capacity for the current European bailout mechanism to 440 billion euros, and stressed on the importance of having a strong stress test to check the health of the financial sector.

These measures are supposed to cal markets after the rise in Spanish and Portuguese yields to record high this week.

On the other hand, the dollar was little changed against a basket of major currencies as it is currently trading near the day's opwening level of 75.68, according to the dollar index gauge.

Among other precious metals, platinum is currently trading at $1744.00 from the day's opening of $1747.50, palladium ticked down to $747.50 from $748.00 and silver inched up to $37.48, 31-year high, from $37.42, as of 08:15 GMT.