London: Gold rose towards $1,100 (Dh4,040) an ounce in Europe yesterday as the euro rebounded against the dollar after euro zone leaders agreed to create a joint financial safety net with the IMF for debt-laden Greece.
Commodities rose almost across the board as the news boosted appetite for assets seen as higher risk.
Spot gold was bid at $1,097.15 an ounce at 0937 GMT, against $1,090.35 late in New York on Thursday. US gold futures for April delivery on the Comex division of the New York Mercantile Exchange rose $3.70 to $1,096.60 an ounce.
"The dollar has weakened again, and that has given metals a lift," said Citigroup analyst David Thurtell. "Risk is being bought again."
The metal is also benefiting from technical support, he said. "$1,091 is a significant Fibonacci level," he said. "It looks like that has held."
The euro recovered from a 10-month low after euro zone leaders agreed on a safety net for Greece which included the IMF, and the dollar backed off a two-month peak on the yen as Japanese exporters sold into its gains. Weakness in the US unit usually boosts gold's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
"The EU agreement means that no money will be forthcoming immediately, but at least there will be a back stop should Greece have financing difficulties over coming weeks," said Credit Agricole in a note.
