Topic: U.S. Dollar

Gold hovered around $1,560 an  ounce on Thursday, and remained on shaky ground as worries about Greece and the euro zone still dominated market sentiment after a European Union summit yielded few practical steps to manage the debt crisis.

European Union leaders, advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, urged the country to stay the course on austerity and complete the reforms demanded under its bailout programme.

The embattled euro hovered just above a near two-year low against the dollar on Thursday and remained vulnerable to further declines as the prospect of a Greek exit from the euro zone kept investors on tenterhooks.

Gold managed to recover most of the ground it lost in a brutal sell-off earlier on Wednesday even as sentiment and the euro remained fragile as European leaders met to discuss the deepening euro-zone debt crisis.

The euro slumped to its weakest level against the dollar in nearly two years on Wednesday on doubts a meeting of European leaders would calm fears of a disorderly Greek exit from the euro zone.

Gold fell on Tuesday under the weight of a weaker euro, as investors bet against a meeting of European leaders this week doing much to tackle the region's debt crisis.

The euro fell on Tuesday as skepticism grew that an informal meeting of European leaders would yield much progress in tackling the debt crisis, with worries about Greek politics and Spanish banking problems expected to keep the currency weak.

Gold prices slipped on Monday after early buying failed to lift prices past $1,600 an ounce, with investors still cautious about the precious metal as they awaited clearer signals on the euro-zone debt crisis.

The euro edged higher against the U.S. dollar on Monday as traders paused after driving the common currency to a four-month low and awaited a meeting of euro zone leaders this week.

If or when policymakers finally decide Greece should leave the euro, the exit could happen so quickly that "new drachma" currency notes might not be printed in time.

"If the currency is not going to exist, it shouldn't be at $1.27," one strategist said, referring to the euro's exchange rate versus the U.S. dollar.

Europe could strengthen its monetary union by giving European politicians the power to declare a sovereign state bankrupt and take over its fiscal policy, the former head of the European Central Bank said on Thursday in unveiling a bold proposal to salvage the euro. 

Gold prices climbed on Friday, building on the previous session's hefty gains, as a recovery in the euro prompted fresh buying of the precious metal.

The euro climbed to its session high against the dollar on Friday as investors position ahead of a weekend meeting of leaders of the G8 major industrial economies after weeks of losses on ongoing concerns about Greece and instability in the Spanish banking system.

Jim Rogers, the chairman of Rogers Holdings, says he expects more turmoil in the global financial markets after Asian stock markets on Friday fell close to four-month lows.