Gold rebounds; Europe, U.S. debt worry weigh

(Reuters) - Spot gold gained half a percent on Tuesday, as a decline of more than 2 percent attracted some buyers, while worries about debt crises in both the United States and the euro zone are expected to keep sentiment fragile.

U.S. lawmakers abandoned their high-profile effort to rein in the country's ballooning debt on Monday, but rating agencies Standard & Poor's and Moody's said there will be no immediate downgrade of the country's credit ratings.

On the other side of the Atlantic, the debt crisis swept closer to the heart of Europe as Moody's warned about France's credit ratings outlook.

"Today there has been some buying interest on the physical market, although overall trading is thin," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

"The strength in dollar is suppressing gold prices, but for the long term, people would still want to keep gold as a safe haven." more