PRECIOUS-Gold edges up ahead of EU summit, trading quiet

* Gold bides time as EU leaders appear divided
    * Deflation fears cap gain, gold down 3.5 pct in 6 days
    * Physical demand from India disappointing
    * Coming up: U.S. GDP data Thursday

 (Recasts, adds details, updates market activity)
    By Frank Tang
    NEW YORK, June 27 (Reuters) - Gold edged up in quiet trading 
on Wednesday, as many bullion investors stayed on the sidelines
awaiting news from a European Union summit to address the
region's debt crisis.
    Equities and other commodities posted much sharper gains
than gold. Even after the day's modest rise, the precious metal
has dropped 3.5 percent in the past six sessions on fears that
Europe's crisis might slow the global economy and dent bullion's
appeal as a hedge against inflation. 
    There were also signs that physical demand for gold was
waning in major consuming country India and elsewhere.
    "The primary focus now seems to be the dreaded potential
deflationary pressures (but) deflation would be more believable
if the European economy were more stable," said Carlos
Perez-Santalla, a precious metals broker at PVM Futures.
    EU leaders, set to begin a two-day meeting on Thursday,
appeared more openly divided than at any time since the crisis
erupted in 2010 after Greece revealed its mounting debt.
    Gold investors looking for more monetary stimulus to boost
the European economy are likely to be disappointed as German
Chancellor Angela Merkel brushed aside calls from Spain and
Italy for emergency action to cut their soaring borrowing costs.
    But Perez-Santalla said European governments will have to
add more stimulus eventually, due to the severity of the debt
crisis among EU countries and banks.
    Spot gold was up 0.2 percent at $1,575.16 an ounce by
3:10 p.m. EDT (1910 GMT).
    U.S. gold futures for August delivery settled up
$3.50 at $1,578.40 an ounce. Trading volume was about half its
30-day average, preliminary Reuters data showed.
    Silver fell 0.6 percent to $26.92 an ounce.    
    The commodities complex, as measured by the RJ/CRB index
, rose 1.5 percent, as oil prices rose on tighter
North Sea supplies and a drop in U.S. crude and distillate
stocks. A rebound in energy prices boosted Wall Street.
    So far this year, gold has tended to move in tandem with
riskier assets like oil and equities. In previous years,
investors often flocked to gold as a safe haven, driving its
price higher in response to economic fears. 

    PHYSICAL DEMAND LANGUISHES
    The gold market has lacked clear direction this week. The
metal rose nearly 1 percent on Monday on safe-haven bids as
equities and oil sold off, but it gave up those gains the next
day on worries of a global economic slowdown.
    Gold demand languished in India as record-high local prices
resulting from the weak rupee kept buyers on the sidelines.
Traders in India are also waiting for the monsoon to pick up,
which could boost the income of farmers, who buy more than half
of India's gold. 
    On Tuesday, data from three major mints in Europe and North
America showed gold coin sales fell in the first quarter as
demand for small investment products eased after helping send
gold to record highs in 2011. 
    Spot platinum was down 1.1 percent at $1,403.75 an
ounce, while spot palladium dropped 3 percent to $573.53
an ounce
 3:10 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1578.40   3.50   0.2  1563.10 1584.60  109,486
 US Silver JUL  26.942 -0.096  -0.4   26.600  27.275   50,013
 US Plat JUL   1409.70 -17.10  -1.2  1403.20 1428.40   11,290
 US Pall SEP    579.75 -13.95  -2.3   575.00  596.70    5,460
                                                               
 Gold          1575.16   3.38   0.2  1563.65 1581.30         
 Silver         26.920 -0.160  -0.6   26.700  27.330
 Platinum      1403.75 -16.05  -1.1  1407.40 1424.50
 Palladium      573.53 -17.47  -3.0   579.15  594.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        116,647   209,399   197,075     20.62    0.09
 US Silver       96,743    57,205    55,663     30.35   -1.22
 US Platinum     24,127    10,864     8,320        23    0.00
 US Palladium     5,496     5,192     4,411                  
                                                               
 
 (Additional reporting by Jan Harvey in London; Editing by Dale
Hudson and David Gregorio)