By FX Empire.com
Gold prices erased rebounded to the upside on Monday amid reports EU leaders are discussing strong measures to ease the European debt crisis, which pushed the U.S. dollar sharply lower against major currencies, allowing gold prices to rise as a result.
Fears from Europe eased over the weekend after a report suggested the International Monetary Fund was working on a plan to help Italy, although the IMF denied any negotiations with Italy. Nonetheless, traders were optimistic that EU leaders are working on drastic measures to ease mounting concerns in markets over the outlook of the European debt crisis.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields in Europe suggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. The EU finance ministers will meet on Tuesday in Brussels, where expectations signal that they will announce details of their plan to increase the firepower of the European Financial Stability Facility EFSF fund.
Accordingly, we should expect more fluctuations in prices, but if the current wave of optimism prevails, we should expect gold prices to extend their gains, although we still preserve our general bearish outlook for gold prices.
Originally posted here
