Analysts said gold already edged up in Asia as uncertainty prevailed over Italy's election has given rise to fears that the euro zone crisis may rear its head again.
ROME(BullionStreet): Gold is all set to get a major boost after Italian elections resulted in a staelemate with no bloc's able to gain a sizeable margin.
According to latest reports, Europe's third largest economy could be headed for political gridlock as the pro-austerity center-left coalition has secured a majority in the lower house of parliament, but not in the Senate.
Analysts said gold already edged up in Asia as uncertainty prevailed over Italy’s election has given rise to fears that the euro zone crisis may rear its head again.
They added that the situation could result in demand for gold as secure investment asset as the Italian situation threaten to reignite the euro's instability after months of relative calm.
Euro zone's single currency, The euro crouched near a six-week low against the dollar while the yen kept some distance from multi-month lows on Tuesday.
A new Italian government requires the approval of a majority in both chambers. Observers expect political deadlock to continue for a while. They fear this could undermine market trust in the euro again as Italy is the 3rd largest economy in the eurozone.