--Comex Dec gold down $23.00, or 1.4%, at $1,616.80/troy oz
--Hopes of coordinated action by EU lift metals off session lows
--Preference for cash over hard assets weighs on gold, silver
--Silver prices down 6.6% as investors remain apprehensive of the volatile metal
--Gold ETF holdings steady, proving resilient despite market rout
NEW YORK (Dow Jones)--Gold and silver pared overnight losses on hopes that European officials would outline a plan of action for dealing with the region's debt problems, but concerns about losses in other markets saw some investors sell precious metals in favor of cash.
The most actively traded gold contract, for December delivery, was recently down $23.00, or 1.4%, at $1,616.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
The September-delivery gold was down $23.10, or 1.4%, at $1,614.40 a troy ounce.
European officials are discussing ways to boost the region's rescue fund and contain the sovereign-debt crisis. Investors hope for more coordinated action from the 17-member currency union after European Central Bank executive board member Lorenzo Bini Smaghi on Sunday expressed support for shaping Europe's bailout fund to mimic the U.S. efforts to stem the 2008 financial crisis.
Gold bounced from session lows but kept in negative territory as traders continue to favor cash above all other assets. December gold touched a two-month low of $1,535.00 a troy ounce over night, almost $400 off its all-time record set earlier this month.
Some investors are girding against margin calls on equities or other assets, while for others are moving out of precious metals on hopes that broad declines will bring buying opportunities.
"Markets are thirsting for liquidity ... precious metals should struggle to rally in this environment," said Walter de Wet, head of commodity research at Standard Bank.
Silver prices proved less resilient than gold as investors continued to stream out of the market. Silver slumped more than 17% on Friday as mounting losses triggered margin calls for some investors, while others bet against a recovery in silver.
Silver for December delivery was recently down $1.971, or 6.6%, at $28.130 a troy ounce. The contract touched a low of $26.150 overnight, trading at nearly half its April record of $49.845 a troy ounce.
"Silver is taking an even harder battering than gold at present and has temporarily fallen to its lowest level since November 2010 this morning... This shows that silver is not suited as a store of value and is behaving more like an industrial metal," said analysts at Commerzbank.
However, one area of the precious metals market is proving more sturdy than the rest. Gold held by exchange-traded funds has been steady throughout last week's market rout, with the world's largest ETF, SPDR Gold Trust (GLD) holding firm at 1,252.21 metric tons.
"As gold ETFs are hardly registering any outflows at the moment, the strong price correction should essentially be due to profit-taking of speculative financial investors," said analysts at Commerzbank.
--Hopes of coordinated action by EU lift metals off session lows
--Preference for cash over hard assets weighs on gold, silver
--Silver prices down 6.6% as investors remain apprehensive of the volatile metal
--Gold ETF holdings steady, proving resilient despite market rout
NEW YORK (Dow Jones)--Gold and silver pared overnight losses on hopes that European officials would outline a plan of action for dealing with the region's debt problems, but concerns about losses in other markets saw some investors sell precious metals in favor of cash.
The most actively traded gold contract, for December delivery, was recently down $23.00, or 1.4%, at $1,616.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
The September-delivery gold was down $23.10, or 1.4%, at $1,614.40 a troy ounce.
European officials are discussing ways to boost the region's rescue fund and contain the sovereign-debt crisis. Investors hope for more coordinated action from the 17-member currency union after European Central Bank executive board member Lorenzo Bini Smaghi on Sunday expressed support for shaping Europe's bailout fund to mimic the U.S. efforts to stem the 2008 financial crisis.
Gold bounced from session lows but kept in negative territory as traders continue to favor cash above all other assets. December gold touched a two-month low of $1,535.00 a troy ounce over night, almost $400 off its all-time record set earlier this month.
Some investors are girding against margin calls on equities or other assets, while for others are moving out of precious metals on hopes that broad declines will bring buying opportunities.
"Markets are thirsting for liquidity ... precious metals should struggle to rally in this environment," said Walter de Wet, head of commodity research at Standard Bank.
Silver prices proved less resilient than gold as investors continued to stream out of the market. Silver slumped more than 17% on Friday as mounting losses triggered margin calls for some investors, while others bet against a recovery in silver.
Silver for December delivery was recently down $1.971, or 6.6%, at $28.130 a troy ounce. The contract touched a low of $26.150 overnight, trading at nearly half its April record of $49.845 a troy ounce.
"Silver is taking an even harder battering than gold at present and has temporarily fallen to its lowest level since November 2010 this morning... This shows that silver is not suited as a store of value and is behaving more like an industrial metal," said analysts at Commerzbank.
However, one area of the precious metals market is proving more sturdy than the rest. Gold held by exchange-traded funds has been steady throughout last week's market rout, with the world's largest ETF, SPDR Gold Trust (GLD) holding firm at 1,252.21 metric tons.
"As gold ETFs are hardly registering any outflows at the moment, the strong price correction should essentially be due to profit-taking of speculative financial investors," said analysts at Commerzbank.
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