Gold Edges up After Euro-Summit Appears to Succeed

Gold prices edged higher Friday after eurozone leaders, in their eighth summit on the sovereign debt crisis this year, agreed to craft a treaty limiting the ability of members to run-up unsustainable government debts.

Leaders from the 17 nations in the eurozone, plus six others among the European Union's 27 members, agreed on a more fiscally integrated union. Britain flatly refused, while Sweden, the Czech Republic and Hungary planned to consult their parliaments.

Participants in the all-night Brussels meeting also agreed to spend more to rescue tottering nations like Italy and Spain.

The European Central Bank head promptly hailed plans for a new EU treaty that will force members to submit yearly budgets to the European Commission for approval.

The praise signaled that the ECB's previously tentative approach to buying bonds from struggling eurozone nations, whose soaring debts have made borrowing costs unmanageable, was being replaced by a more accommodative posture.

And in fact, the ECB bought Italian bonds early Friday, according to traders.

It's going to be the basis for a good fiscal compact and more discipline in economic policy in the euro area members, Draghi told Reuters. We came to conclusions that will have to be fleshed out more in the coming days.

Doubts about whether treaty details can actually be fleshed out in the coming days - or months -- left Asian stocks and the euro somewhat lower. One area of concern focused on Finland and Slovakia, whose leaders fear smaller eurozone members could be marginalized.

Eurozone members early Friday also agreed to loan the International Monetary Fund $200 billion, a first for the eurozone's national central banks. Central banks from the 10 European Union members that do not use the single currency agreed to lend the IMF another $50 billion.

The loans appeared to soften IMF resistance to supporting the eurozone.

I appreciate this demonstration of leadership from Europe and I'm hopeful that others will also do their part, IMF Managing Director Christine Lagarde told Bloomberg.

UBS analyst Edel Tully said Friday in a note that a positive outcome to the meeting should lift gold prices and that signs of more accommodation by the ECB should boost the market's risk sentiment.

The dollar climbed to a one-week high against the single currency before the euro pared some of its losses. Asian stocks were down sharply, European equities were edging higher and U.S. stock futures rose, signaling a positive open.

Gold for February delivery rose $4 to $1,714.40, while spot gold added 77 cents to $1,715.20.

Silver for March delivery increased 28 cents to $31.82, while silver for immediate delivery rose four cents to $31.89.