(Adds details, updates prices; previous SINGAPORE)
* Market cautious ahead of EU summit, ECB meeting
* Gold holds around 100-day moving average
* Gold-platinum spread widens
By Harpreet Bhal
LONDON, Dec 7 Gold steadied on Wednesday,
with investors marking time ahead of an EU summit this week
which they hope will deliver a lasting solution to the region's
debt crisis, while a weak euro weighed on the precious metal's
Spot gold edged down 0.1 percent to $1,726.65 an
ounce by 1058 GMT, having hit a near one-week low hit in the
Caution about the euro zone debt crisis is expected to
dominate sentiment this week, ahead of a European Union summit
on Friday and a European Central Bank meeting on Thursday.
The EU summit comes against the backdrop of mounting
expectations that leaders will take steps to forge greater
fiscal integration in the bloc, while the ECB is seen cutting
its main interest rate for the second month running.
Monetary policy easing raises the inflation outlook and
benefits gold, seen as an inflation hedge.
"For the moment gold is likely to trade with the rest of the
commodity sector and the short-term outlook depends on what we
hear from the summit," said Eugen Weinberg, head of commodity
research at Commerzbank.
"But hopes are already so high that it is likely that some
will be disappointed."
Adding to pressure for gold prices, the euro fell against
the dollar after a German government official said Berlin was
increasingly pessimistic about the chances of a deal to solve
the euro zone debt crisis at this week's summit.
A strong dollar makes commodities priced in the U.S. unit
more expensive for holders of other currencies.
U.S. gold was up 0.2 percent at $1,734.40
GOLD-PLATINUM SPREAD WIDENS
Gold hit a record $1,920.30 in September and is trading up
almost 22 percent in the year-to-date. On Wednesday it held just
under its 100-day moving average at $1,727.73, and analysts
reckon events this week could test the precious metal's
"It's a difficult week ahead, but gold risks testing its
recent lows around $1,700/oz. If European leaders manage to come
up with a plan, we will likely see a relief rally in the euro
which will take gold higher with it," ANZ analysts said in a
Among other precious metals, spot silver eased 0.3
percent to $32.62, while platinum gained 0.5 percent to
$1,527.24 an ounce, bouncing from a 1-1/2-month low of $1,494.35
hit in the previous session.
The gold-platinum spread widened to $204 an ounce on
Tuesday, its widest since Reuters started recording prices in
1985, and remained around $200.
Platinum has been at a discount to gold for the past three
months -- the longest period since 1985, as the metal, mainly
used in jewellery and autocatalysts, lost its attraction during
the global economic downturn.
Spot palladium rose 0.6 percent to $671.72.
(Editing by Keiron Henderson)