Forex Pros - Gold futures erased losses on Monday, as mounting fears over the euro zone's peripheral debt crisis boosted the safe haven appeal of the precious metal, however gains were capped amid a broadly stronger U.S. dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,516.35 a troy ounce during U.S. morning trade, edging 0.23% higher.
It earlier rose to USD1,520.05 a troy ounce, the highest price since May 11.
Gold prices in euro soared to a record high of EUR1,080.22 an ounce.
On Sunday, Spain's ruling Socialist party lost to conservatives in local and regional elections, raising concerns about how the country will address its debt problems.
The results came after Fitch Ratings cut Greece's debt ratings on Friday, saying a "soft" restructuring of the country's debt by European Union policy makers would be considered a default event, while Standard & Poor's cut its outlook for Italy to negative from stable on Saturday.
Investors often buy gold and silver as refuges against economic and political uncertainty.
However, gains were limited after the U.S. dollar rose to a ten-week high against the euro, while the dollar index climbed 0.78% to hit 76.37, after earlier rising to a seven-week high of 76.54.
Global financial service provider Commerzbank said in a report earlier Monday that, "while the sharp jump in the dollar has failed to push gold significantly lower, we expect the metal's direction to continue to be largely determined by currency moves as investors eye developments in Europe, as well as monetary policy in the U.S."
Elsewhere, silver for July delivery added 0.26% to trade at USD35.13 a troy ounce during U.S. morning trade, while copper for July delivery plunged 3.1% to trade at USD3.977 a pound.
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