Gold rallies on fresh round of euro worries

The gains for gold and silver came as stocks dropped in Europe and Asia, and the U.S. stock market traded lower

Equities stumbled as the Greek government said it will miss its deficit target this year and agreed to additional austerity measures ahead of a meeting of euro-zone finance ministers on Monday.

Analysts at Karvy Commodities Broking said both gold and silver are likely to remain volatile in the coming days as traders look for clues on both the global economy and the euro-zone debt crisis.

“Any positive signs from the debt-beleaguered euro zone will cheer up investors, and money may flow out of gold into stocks and other asset classes,” the firm said in a note to clients.

Over the weekend Qatar Holdings, a division of Qatar’s sovereign wealth fund, said it would pay $775 million for a stake in European Goldfields , including providing $600 million to finance operations in Greece.

The Daily Telegraph reported that the deal is part of a broader strategy at the sovereign wealth fund, under which it will spend up to $10 billion acquiring stakes in gold producers.

The newspaper said that the fund wants to invest in a range of commodities, but that access to physical gold is its top priority. – Source: MarketWatch.com

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