Gold rises as Italy vote uncertainty boosts safe-haven appeal

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U.S. gold was up half a percent at $1,595.10.   (Reuters) U.S. gold was up half a percent at $1,595.10. (Reuters)
SummaryU.S. gold was up half a percent at $1,595.10.

Spot gold inched up on Tuesday, extending gains from the previous session as uncertainty over Italy's election results stoked fears of a resurgent euro zone debt crisis, boosting bullion's appeal as a safe-haven investment.

FUNDAMENTALS

Spot gold had edged up 0.1 percent to $1,595.41 an ounce by 0034 GMT, extending gains into the fourth straight session.

U.S. gold was up half a percent at $1,595.10.

Election projections show that no party is likely to win a majority in the upper house of Italy's Senate, fuelling worries about revived political uncertainty in the euro zone's third-largest economy, which could reignite the debt crisis.

Investors will closely watch U.S. Federal Reserve Chairman Ben Bernanke's testimony to Congress on Tuesday and Wednesday, to seek clues on the Fed's attitude on its monetary policy.

Likely government budget cuts and the prospect for messy political fights over fiscal policy will weigh on the U.S. economy this year and hold growth to a tepid 2.4 percent, according to a survey of forecasters published on Monday.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 7.83 tonnes, or 0.61 percent, to 1,272.848 tonnes on Feb 25, the lowest since August 2012.

MARKET NEWS

U.S. stocks on Monday suffered their biggest drop since November after the strong showing in Italian elections by groups opposed to the country's economic reforms. The euro crouched near a six-week low against the dollar while the yen kept some distance from multi-month lows on Tuesday.

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