Daily Gold Update

Source:Bloomberg

New York— Gold declined from near a five-month high on speculation that an emergency fund agreed by European policy makers will be sufficient to contain sovereign debt risks and help sustain growth in the region. Gold for immediate delivery fell as much as 1 percent to $1,196.10 an ounce, before trading at $1,197 at 3 p.m. in Singapore. The metal reached $1,213.07 on May 7, the highest level since Dec. 3, after equities in Europe and the U.S. extended declines on concern policy makers weren�t working fast enough to prevent debt problems spreading. �Risk appetite is reviving as Europe took some action to address fiscal concerns in the region,� said Yu Kyung Kyu, a trader with Eugene Investment & Futures Co. in Seoul. �Gold has risen too fast too far, which is also likely to entice some people to lock-in gains.�

The euro advanced for a second day as European finance ministers agreed an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stem the debt crisis and halt speculative attacks on the euro. Asian stocks rose 1.5 percent, ending a five-day losing streak and the dollar fell 1.1 percent against a basket of six major currencies. Gold has strengthened 9.2 percent this year as escalating financial turmoil in Europe fanned demand for safer assets, including the dollar. Gold priced in euros, sterling and Swiss francs touched records last week. See full story.