Gold rises in Europe

Gold rose to around $1,100 an ounce in Europe on Monday as the dollar eased broadly, while renewed physical and safe-haven buying also helped support prices. Gold was bid at $1,096.10 an ounce by 1616 GMT, against $1,091.65 an ounce on Friday, having earlier touched a high at $1,103.80. US gold futures for February delivery were at $1,096.80 per ounce, up 0.7 percent.
"There is risk (aversion) interest," said Marc Elliott, an analyst at investment bank Fairfax. "There is probably a level of support at about $1,100 - it may dip below but not much further for the time being." "We are quite bullish on gold longer term," he added.
"The US dollar is going to be de-valued heavily going forward ... when the western world has to pay off all the stimulus packages." A weaker dollar helped bullion prices, after a sharper-than-expected fall in US existing home sales rekindled concerns about an economic recovery. A weak US currency makes metals priced in dollars less expensive for holders of other currencies.
India, historically the world's top gold consumer, continued buying, with limited quantities changing hands below the $1,100 an ounce level, dealers said. "They are recovering a bit," said Eugen Weinberg, an analyst at Commerzbank. "The slump of the last week might be considered by some bargain hunters as being an excessive one.
"Some see in gold protection going forward, if the correction on equity markets continues ... but also there is some physical buying at the current levels after the strong decreases." On Friday, gold hit a near five-week low at $1,081.90, bringing its losses for the week to more than 3 percent, after US President Barack Obama's proposal to limit financial risk-taking hit the broader commodities markets.
Obama's plan to restrict banks or financial institutions from associating with a hedge fund or a private equity fund, unveiled on Thursday, caused stocks and commodities to tumble.
"The noose certainly seems to be tightening around the gold bulls with President Barack Obama's proposal to limit financial risk-taking, especially by the banking sector and also due to the growing expectations that China will continue to tighten its monetary stance," said Pradeep Unni, senior analyst and trader at Richcomm Global Services.
"The markets will continue to be volatile as the month ends, but the technical damage done in Friday's session hints that we have further downside targets in gold at the moment," he added. There are signs that China, the world's largest gold producer, could move to tighten monetary policy to rein in its booming economy.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,111.922 tonnes as of January 22, unchanged from the previous business day. Palladium prices rose but were some way off last week's 19-month highs of $471.75 per ounce, when the recent launch of exchange-traded funds in the United States fuelled investment demand.
Palladium climbed to $436.50 an ounce, versus $430.50 late in New York on Friday. Spot platinum was bid at $1,545 per ounce, against $1,546.50. It touched $1,654 last week, its highest since August 2008. Holdings of ETF Securities' US-based platinum exchange-traded fund rose 10 percent on Friday, while those of its US palladium product climbed by a third, the company said on Monday. Among other precious metals, silver prices were at $17.04 an ounce versus $16.96 an ounce late on Monday.