Gold advanced before Chancellor Angela Merkel meets today with the President of the International Monetary Fund Lagarde on some optimism European leaders are on their way to resolve the crisis before they meet in the EU summit on January 30. The meeting comes after Merkel-Sarkozy meeting yesterday in Berlin which tackled a rulebook for closer fiscal compact in the euro zone. Also from the euro area, the Greek government sold 1.625 billion euros on Tuesday, from the planned 1.25 billion euros, of six-month notes with a decline in yield to 4.90% compared with 4.95% in December's auction. This week, Spain plans to sell bonds maturing in 2015 and 2016, while Italy is expected to auction 3-, 5- and 15- year bills, where both countries may reach an aggregate bond selling of 262 billion euros in the first quarter, according to Deutsche Bank AG forecasts. However, the euro may become once again under pressure where ECB data released on Tuesday showed that bank's overnight deposits at the ECB rose to record high for the third day in a row reaching 482 billion euros, reflecting the concerns in markets which prompted banks to lend from the ECB instead of depending on each other. Moreover, gold and oil benefited from the dollar's slide for the second day. Now, the dollar index, which tracks the greenback's movements versus six major currencies, is hovering around 80.80 compared with the day's opening of 80.97. On the other hand, crude oil is traded higher near $102.90 a barrel, showing some bearishness, compared with the day's opening of $101.29. Spot gold is currently traded slightly higher around $1634.80 an ounce, after recording a high $1640.01 and a low of $1608.30.
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