SINGAPORE (Commodity Online) : Gold showed signs of recovery in Asian trade as investors turned to safe haven buying on reports of Greek inability to repay its debts.

Gold for immediate delivery was seen trading at $1220.24 an ounce while US gold futures for August delivery was at $1222.5 an ounce on the Comex in New York.

A report by Moody’s cast’s doubts about Greece's ability to solve its debt problems reminded investors that the debt crisis in Europe was far from over.

The report sends Asian stocks lower Tuesday and also hit the European single currency.

Euro rally against the dollar eased as investors booked profits and sentiment toward the single currency remained fragile.

Meanwhile, holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at a record 1306.14 metric tons.

However, platinum dropped for the first time in four days, losing 0.2 per cent to $1556.50 an ounce. Palladium gained 0.3 per cent to $459.25 an ounce, while silver climbed 0.3 per cent to $18.28 an ounce.

Bullion rallied to a record high last week on worries that the European sovereign debt crisis is spreading and the U.S. economy may be slowing.

On Monday, gold dropped below $1,220 an ounce as improving appetite for assets seen as higher risk, such as equities and the euro, lessened interest in the metal as a safe haven investment.

Spot gold closed at $1,217.45 an ounce while U.S. gold futures for August delivery was at $1,224.50 an ounce.

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