Gold climbs in Europe

Gold rose on Thursday as a recovery in Chinese shares cooled fears of a wider rout in the major bullion consumer, and after minutes from the Federal Reserve's last meeting suggested caution towards a near-term increase in interest rates. Strength in the dollar versus the euro kept a lid on gains, however. Spot gold was up 0.5 percent at $1,164.03 an ounce at 1400 GMT, while US gold futures for August delivery were flat at $1,163.50.
The metal hit its lowest since mid-March earlier this week at $1,146.75 an ounce, just a few dollars from its low for the year, a key support level. Gold has been weighed down by expectations the Fed will raise US interest rates for the first time in nearly a decade, lifting the opportunity cost of holding non-yielding gold while boosting the dollar. The minutes from the Fed's June 16-17 meeting showed the central bank continues to grapple with its plan to raise rates, in the wake of mixed economic data domestically and market turmoil abroad.
"Commodities got something of a lift late yesterday as the dollar dropped back on the Fed's 'lower for longer' stance, and the upwards momentum appears to have carried through today despite the dollar paring back some losses," Jonathan Butler, an analyst at Mitsubishi Corp, said. "Today was a rare 'up' day on the Shanghai Commodities Exchange, perhaps the government's interventions are starting to pay off." Commodities across the board were lifted by a rebound in battered Chinese stocks, after China's securities regulator barred investors with stakes of more than 5 percent from selling shares for the next six months in a bid to halt a plunge in stock prices.
"Precious metals and metals in general are doing well because Chinese stocks are doing well," ABN Amro analyst Georgette Boele said. "If tomorrow we have further selling (in China), they will go down again." Traders are also awaiting news on Greece, after European Central Bank President Mario Draghi voiced doubts about the chances of rescuing the country from bankruptcy. Among other metals, spot silver was up 2.1 percent at $15.45 an ounce. Palladium was down 0.4 percent at $645.47 an ounce after slipping overnight to its weakest since June 2013. Platinum was down 0.7 percent at $1,025.49 an ounce after falling on Wednesday to its lowest since February 2009.