Gold rallies in Europe

Gold bounced from one-week lows in Europe on Tuesday after support around $675.00 an ounce held and as a weaker dollar encouraged buyers back into a market battered by Monday's heavy price fall, traders said.
"The 675/680 area was important...and as the dollar weakened gold went higher," one said.
Spot gold hit an early low of $674.00 an ounce, then rebounded smartly to $689.00/690.00 by 1437 GMT, up from $682.60/683.60 late in New York on Monday.
Gold, used in jewellery and as an investment, fell more than four percent on Monday, when a broad financial market sell-off saw base metals, oil and equities buckling under speculative selling from record highs.
"We believe that this correction - which we had repeatedly warned was inevitable if unforecastable in both timing and extent - will be a temporary phenomenon," broker UBS said in a report.
Prices hit a 26-year high of $730.00 on Friday on fund buying as investors diversified into precious metals on record-high oil prices, tensions over Iran's nuclear ambitions and uncertainty over the dollar's outlook.
"The dips recently have been short-lived and the market has always bounced back. So it (Monday's decline) could be seen as a one-day wonder as there is still pent-up demand behind the scenes," the trader said.
Traders noted that currencies, equities and base metals had all experienced turbulence in the past few days.
"Gold is having to juggle a lot of balls at the moment," another trader said.
Gyrations in base metals prices had affected gold during the sell-off, and on Tuesday copper was recovering from Monday's fall - nine percent at its extreme.
In other precious metals, platinum stood at $1,295/1,305 an ounce from $1,270/1,278 late in New York overnight and off last week's record high of $1,334.
Refiner Johnson Matthey released its widely awaited annual review on Monday, saying the market was expected to register a deficit for the eighth year in a row.
Palladium was at $375/381 from $363/369 in New York on Monday, when it touched its lowest in nearly three weeks at $352 on fund selling.
Silver fell to its lowest in nearly three weeks to $12.80 before rebounding to $13.37/13.47. The metal had been last quoted at $13.29/13.30 in New York, compared with a 25-year peak of $15.17 last week.