LONDON, May 11 -- Gold rose in Europe on Tuesday as concerns over the euro zone's fiscal health returned, especially over Greece's ability to reduce its large budget deficit.
The metal hit five-month highs last week as the prospect of Greece's debt problems spreading to other euro zone economies prompted buying of gold as a haven, but fell on Monday on news of the euro zone's $1 trillion package.
The package sparked a relief rally in financial markets on Monday, with stock markets, the euro and industrial commodities rising sharply. The run higher has now run out of steam.
"Peripheral European Union economies still face enormous fiscal and competitiveness challenges," HSBC said in a note. "We believe that these challenges will keep a bid in gold and may boost bullion prices if equity and other paper markets cool."