Euro zone government leaders were unable to arrive at an accord that would ensure Greece acquires the second tranche of its June 2010 bailout, which would prevent the Aegean nation from defaulting on repayments from the first tranche. The failure to agree tightens circumstances against George Papandreou, prime minister of Greece, who now is likely to slash domestic budgets.
"We are still far from certain on the future of mounting peripheral debt costs in the monetary union," Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. "The political situation in Athens remains explosive. We prefer the upside" for the precious metal.
At 8:31 a.m. on Monday, gold futures slipped 0.16 percent, a $2.50 drop to $1,536.60 per troy ounce.
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