Gold holds above $1,580/oz on EU summit uncertainty

Gold held steady above USD 1,580 an ounce on Tuesday after rising in the previous session on safe haven buying ahead of an important European summit this week, which is unlikely to produce substantial measure to solve the debt crisis.

A fifth euro-zone country turned to Brussels for emergency funding on Monday when Cyprus announced it was seeking a lifeline for its banks and its budget, hours after Spain submitted a formal request to bail out its banks.

Fundamentals

* Spot gold hardly changed at USD 1,584.49 an ounce at 0022 GMT. Gold hit a lifetime high of about USD 1,920 in 2011, when investors turned to the metal as a safe haven during the debt crisis in Europe.

* US gold for August delivery slipped USD 2.90 an ounce to USD 1,585.50.

* Struggling debtor Spain is likely to pay its highest short-term borrowing rates in over six months on Tuesday as investors demand high premiums, sceptical about euro zone leaders' readiness to act decisively to tackle the bloc's problems.

Market News

* Japan's Nikkei share average fell to a one-week low in early deals on Tuesday on scepticism that this week's European summit will produce any significant progress to tackle the currency bloc's debt crisis.

* US oil held steady above USD 79 on Tuesday as forecasts of a drop in crude stockpiles supported prices amid low expectations that a European summit this week could resolve the region's debt crisis and boost global fuel demand.

* The euro slipped to an almost two-week low against the US dollar on Monday and more losses were expected as investors bet a European summit will fail to find a solution to the region's debt crisis.