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Gold trades above USD1,790 as euro zone debt concerns remain

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Forexpros - Gold futures were up for a third day on Wednesday, re-approaching the psychologically-important level of USD1,800-an-ounce after a summit meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel failed to produce a resolution to the region's ongoing debt crisis.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,794.15 a troy ounce during early European trade, gaining 0.4%.

It earlier rose as much as 1.33% to trade at USD1,795.65 a troy ounce, the highest price since August 11, when prices rose to a record high of USD1,815.65 a troy ounce.

Gold's safe haven appeal was boosted after Tuesday's meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy failed to ease concerns over the euro zone's ongoing sovereign debt crisis.

The two leaders proposed a new council to improve the governance of the euro zone and planned to introduce a financial transaction tax in September.

But they fell short of increasing the region's bailout fund, which many feel is inadequate should the debt crisis spread to Italy, Spain or France.

They also rejected issuing euro bonds, saying that the bonds will not solve the single currency bloc's debt issues, disappointing investors who had been anticipating such an action.

Concerns over the global economic outlook boosted gold on Tuesday as weaker-than-expected growth data out of Germany and the wider euro zone added to fears over the region's growth prospects

Gold is considered a refuge from financial risk and a haven against economic and political uncertainty.

Elsewhere on the Comex, silver for September dipped 0.3% to trade at USD39.92 a troy ounce, while copper for September delivery rose 0.4% to trade USD4.009 a pound.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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