LONDON, Sept 12 Gold bounced more than 2 per cent in Europe on Friday from the previous session`s 11-month low, reflecting gains across the board for precious metals, as the dollar retreated from highs against the euro.
Spot gold rose to $753.90/ 755.10 an ounce from $739.60/ 741.20 an ounce late in New York. Earlier it rallied more than 2 per cent to a session high of $757.90.
The higher euro-dollar has taken away selling pressure from investors, Commerzbank senior trader Michael Kempinski said.
The dollar eased broadly as a more optimistic view of investment bank Lehman Brothers` future boosted equities and prompted currency traders to cash in on recent gains.
Gold typically moves in the opposite direction to the US currency, as it is often bought as a currency hedge.
Traders are awaiting further news on Lehman later in the day, amid speculation the bank may be planning an announcement.
Gold also is being helped by a pick-up in crude prices. Oil rose over $1 a barrel on fears Hurricane Ike could affect production in the United States, the world`s biggest energy consumer.
Traders also are looking to economic data due out later in the session for clues as to the future direction of the dollar.
Traders say they have seen firm demand for gold coins, bars and jewellery, but the support this lends to prices may not be felt until they fall to lower levels.
Physical demand increased again around the $750 levels, but a lot of customers expect a bigger (price) drop in the future, Kempinski said. Some customers are looking for $700.
Platinum has dropped 14 per cent since last Friday, and is more than 50 per cent below the all-time high of $2,290 an ounce it hit in March.
Palladium also has shed 9 percent of its value since last Friday, and touched a near three-year low of $212 on Thursday.
Spot platinum was at $1,166.00/1,186.00, up from $1,126.50/1,146.50 late in New York on bargain hunting, having earlier hit a session high of $1,180.
Palladium climbed to $243.00/251.00 against $226.50/234.50. Spot silver was at $10.80/10.87 against $10.43/10.51.—Reuters
