Gold marks time; Spain crisis weighs on euro

Gold traded little changed on Tuesday, after attempts to breach the resistance at US$1,580 an ounce stalled as Spain\'s deepening crisis rekindled worries about euro zone finances, sending the single currency to near its two-year low against the dollar. Bullion has fallen more than 5 percent so far this month, on course for its biggest monthly decline since December, as fear of Greece\'s exit from the euro zone sank the single currency and boosted the dollar index to a 20-month high, weighing on gold priced in the greenback. The impact of a strong dollar more than offset gold\'s safe-haven appeal, especially as the prospect of further monetary easing by the US central bank in the near term has dimmed. \"If Spain ended up seeking an international bailout, it would trigger more panic than Greece,\" said Li Ning, an analyst at Shanghai CIFCO Futures. \"Such concern is reflected in the enormous pressure at the US$1,600 level, as the dollar index appears to retain an uptrend.\" Gold has attempted to breach that resistance level a few times over the past week or so without success, which could in turn send prices lower, she cautioned. Spot gold was little changed at US$1,573.89 an ounce by 0259 GMT, retreating from a one-week high of US$1,583.50 hit the previous session. US gold edged up 0.3 percent to US$1,573.60. As a sign of persistent worries about Spain\'s finances, the country\'s ten-year borrowing costs rose to near the dangerous 7 percent level, and the risk premium on Spanish government debt over German Bunds hit a euro-era high, as investors sought refuge in assets perceived to be low-risk. Trading was anaemic, as investors await the key US non-farm payrolls data and China official purchasing managers index data later in the week, for clues to how the world\'s top two economies have performed during the euro zone turmoil. \"People don\'t know where things might go and the physical market is quiet,\" said a Singapore-based dealer, adding that buying from both China and India had been slow. Potentially supportive of platinum group metals demand, China may soon resume paying subsidies to rural residents who trade in old vehicles for new, fuel-efficient ones, in an effort to rekindle demand amid a slowdown in the world\'s largest auto market. Spot platinum edged down 0.2 percent to US$1,428.74, and spot palladium lost 0.3 percent to US$599.90. Palladium was the worst performer in the precious metals complex with an 8 percent year-to-date decline. Current platinum prices could endanger investment plans to allow platinum miner Lonmin to ramp up production at key shafts and slash unit costs, the chief executive of the world\'s third-largest producer of the precious metal said. From Arabian Business