Gold tracks risk assets down on Europe fear

SINGAPORE, Nov 15 (Reuters): Gold posted modest losses on Tuesday, tracking losses in riskier assets, as worries about the euro zone's ability to contain its debt crisis resurfaced after Italian bond yields rose, reflecting the nervousness of investors. Though gold is supported by its safe-haven allure, it is prone to spillover from the heavy sell-off in the wider financial market, where sentiment remains fickle over Europe's painful journey towards solving its debt crisis. Asian shares fell as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence. "There is a much greater likelihood of its ending badly," said a Singapore-based trader. "Whether it means the euro would dissolve is a different question, but the government bond market seems to be deteriorating. A lot of people in the market still have the idea that gold would be a reasonable thing to hold while the situation plays out." Spot gold lost 0.6 percent to $1,768.44 an ounce by 0738 GMT, extending losses from the previous session. s