SINGAPORE, July 22 (Reuters) - Gold steadied below $1,600 on Friday, as Europe's sweeping new action on the debt crisis and signs of progress on a U.S. deficit reduction deal sapped some safe-haven demand.
But lingering uncertainty over the U.S. debt talks supported sentiment.
FUNDAMENTALS
* Spot gold edged up 0.2 percent to $1,590.71 an ounce by 0040 GMT.
* U.S. gold
* Euro zone leaders agreed at an emergency summit on Thursday to give their financial rescue fund sweeping new powers to help Greece overcome its debt crisis and prevent market instability from spreading through the region.
* Efforts to craft a $3 trillion deficit-reduction deal gained traction on Thursday as the White House and congressional leaders scrambled to sort through competing options and stave off a devastating default.
The main obstacle remained the issue of tax increases that President Barack Obama's Democrats want and Republicans vehemently oppose. There were conflicting accounts of how and when higher revenue might kick in, and the White House vowed there would be no deal without this.
* The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings dropped 0.3 percent to 1242.69 tonnes by July 21, from 1246.02 tonnes on July 20.
* IShares Silver Trust , the world's largest silver-backed exchange-traded fund, gained 45.46 tonnes to 9,846.17 tonnes.
* Spot silver gained 0.2 percent to $39.36.
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MARKET NEWS
* U.S. stocks climbed on Thursday as signs of progress on the U.S. debt talks and concrete action from Europe on its own debt crisis heartened investors.
* The euro rallied to a two-week high against the dollar in Asia on Friday after euro zone officials gave their financial rescue fund sweeping new powers to solve Greece's debt troubles, easing fears the country's debt crisis would spread.
DATA/EVENTS 0800 Germany Ifo business climate Jul 0800 Germany Ifo current conditions Jul 0800 Germany Ifo expectations Jul 1930 U.S. CFTC trader commitments-futures Weekly <0#1CFTC00> 1930 U.S. CFTC trader commitments-fut&opnsWeekly <0#3CFTC00>
PRICES Precious metals prices 0040 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1590.71 2.81 +0.18 12.07 Spot Silver 39.36 0.08 +0.20 27.54 Spot Platinum 1782.75 1.75 +0.10 0.86 Spot Palladium 803.22 -2.25 -0.28 0.47 TOCOM Gold 4023.00 -46.00 -1.13 7.88 36627 TOCOM Platinum 4553.00 -11.00 -0.24 -3.05 2253 TOCOM Silver 98.60 -2.70 -2.67 21.73 298 TOCOM Palladium 2034.00 7.00 +0.35 -3.00 147 COMEX GOLD AUG1 1591.40 4.40 +0.28 11.96 2770 COMEX SILVER SEP1 39.39 0.44 +1.14 27.31 4136 Euro/Dollar 1.4393 Dollar/Yen 78.54 TOCOM prices in yen per gram. Spot prices in $ per ounce. COMEX gold and silver contracts show the most active months (Editing by Himani Sarkar)