LONDON, Nov 10: Gold rose 2 per cent in Europe on Monday, lifted by gains across commodities after China announced a $600 billion economic stimulus package, and by weakness in the dollar against the euro.

Spot gold hit a peak of $753.10 an ounce, before easing to $751.80/753.30 by 1021 GMT, against $735.95 late in New York on Friday.

Oil climbed more than $2 a barrel and base metals prices surged after the Chinese announcement, boosting interest in all commodities, traders said.

The stimulus package from China has allowed other commodities to perform better, (and) gold is following the other metals, said Deutsche Bank trader Michael Blumenroth.

The euro-dollar price is also a better influence at the moment, he added.

China launched a huge stimulus plan on Sunday, pledging nearly $600 billion in extra spending, or roughly 15 per cent of this year’s GDP. The money is to be spent by the end of 2010.

The bulk of the money will go towards infrastructure projects, said Standard Bank analyst Walter de Wet. Equity markets, currency markets and commodity markets in Asia reacted favourably to this news this morning.

Platinum prices climbed more than 3 percent as fears abated that the demand picture for industrial precious metals will continue to worsen.

The white metal is also being helped by fresh fears over supply after major producer Anglo Platinum said last week it may lose up to 200,000 ounces of output this year due to a smelter shut-down.

However, all the platinum group metals remain well off highs after posting sharp losses in recent months on waning demand from carmakers, who account for more than 50 per cent of PGMs consumption.

Platinum continues to consolidate having broken out of the steep down-channel on the charts, in place since mid-July, said James Moore, an analyst at TheBullionDesk.com.

But, with gold and silver showing signs of slippage the white metal is at risk of another test lower in the coming session, potentially dragging the metal back below $800/oz.

Spot platinum rallied to a high of $875 an ounce, before easing to $861.50/881.50, against $845. Its sister metal palladium was at $226/231 an ounce against $220.—Reuters