LONDON: Gold steadied on Tuesday as traders weighed a buoyant dollar against a deepening political crisis in Italy that provoked a second day of heavy selling on European financial markets.
Italy’s president set the country on a path to early elections on Monday, appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget.
Investors fear repeat elections – which could take place as soon as August – might serve as a quasi-referendum on Italy’s role in the European Union and euro zone and strengthen the country’s eurosceptic parties even further.
Gold, seen as a safe have, often gains from political turmoil.
But keeping the metal’s upside in check, the events in Italy pushed the dollar to a 10-month high versus the euro, making dollar-priced gold costlier for non-US investors.