Gold drops on rising risk appetite

Gold slid yesterday as higher hopes of a resolution to the Eurozone debt crisis persuaded investors to shrug off a downgrade to Spain's credit rating and opt for equities, but a softer dollar helped provide some support. Spot gold was bid at $1,647.24 a troy ounce at 1158 GMT from $1,658.64 an ounce late in New York on Tuesday. European stocks and the euro rose on optimism policymakers will take major steps at a summit this weekend to solve the festering debt crisis and offset the impact from a cut to Spain's sovereign credit rating. That was denied by senior European Union officials, but not before the tone for the day was set.