Gold declines on slow physical demand

New York: Gold today declined one percent, a second day in a row as physical purchases slowed and investors awaited a summit of European leaders this week.

Gold fell 16.90 dollar, or one percent to 1,717.60 dollar an ounce on the Comex, in continuation to one percent fall in the previous session. Silver also fell by 1.2 percent to 31.97 dollar an ounce.

[caption id="attachment_149508" align="alignleft" width="380" caption="The ECB was said to begin buying Italian and Spanish debt in August. Reuters"][/caption]

Physical gold demand in India, the biggest buyer, fell about 53 percent last week from the previous week, according to UBS. Standard and Poor's said it may cut the credit ratings of 15 euro members, pending the outcome of this week's summit.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said they "took note" of S&P's announcement.

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Closer EU fiscal union would "strengthen coordination of budget and economic policy" and promote stability and growth, they said.

The ECB was said to begin buying Italian and Spanish debt in August, and gold bar and coin demand in Europe more than doubled to 118.1 metric tons in the third quarter from a year earlier, the London-based World Gold Council said.

PTI