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LONDON (Reuters) - Gold rose almost 1 percent on Thursday, bouncing off a 4-1/2 monthlow, as weaker prices attracted new physical buyers, but gains werelikely to be limited as the euro was undermined by fears of adeepening debt crisis in Greece. Spot gold rose 0.6 percent an ounce to $1,547.86 by 0950 GMT, from$1,538.30 late in New York on Wednesday. The precious metal rose to a high of $1,553.36 earlier, as the eurobriefly regained strength following a drop to a four-month low onWednesday. Bullion plunged to $1,527 - its weakest since Dec. 29 -on Wednesday. U.S. gold futures hit a high of $1,553.70 an ounce and were at$1,548.40, up 0.8 percent. The contract had plunged to amulti-month low of $1,526.70 on Wednesday. Gold, traditionally a safe-haven asset, has been moving in tandemwith riskier assets such as equities, industrial metals and oilthis year, as investors turned to the safety of the dollar. However, this may soon change, according to some. "Since yesterday we have seen more interest come through fromphysical buyers especially in India because prices have come downsubstantially," said Afshin Nabavi, head of trading at MKS Finance. "But there is more upside than downside risk for gold at the momentas the political situation is very jittery with tension in Iran andeconomic problems especially in the euro zone. People will want tobuy physical gold again. Those who went out since December are nowwaiting for prices to stabilize before getting in again." Since last year, many investors have unwound their bullish bets ingold, cashing in the metal to cover for losses in other markets,after the turmoil in Europe raised the spectre of a recession thatthreatens to hurt the global economy. But in China, gold demand hit a record high in the first quarterdue to investor worries over inflation and property market curbs,the World Gold Council said on Thursday, bucking a lower trend inglobal consumption driven by higher gold prices. PHYSICAL BUYING "Evidently, some buying on the dips emerged above December lowsalso with fresh physical inflows with prices starting to lookattractive," said VTB Capital in a research note. "Some physical interest is welcome, but much more serious buyingout of Asia needs to emerge for us to see a sustained recovery. Fornow, the investor community remains spooked and is unlikely toreturn to the market with full vigour unless we have a monumentalcredit event in Europe or a pronounced dollar retreat." The euro held above a four-month low on Thursday, taking a breatherfrom a sharp sell-off, although gains are likely to be checked byworries about the solvency of some Greek banks that are adding tofears the country may exit the euro zone. A weaker euro against the dollar makes dollar-priced commoditiessuch as precious metals costlier for euro holders. IMF chief Christine Lagarde warned of "extremely expensive"consequences if Greece were to leave the euro zone, a once taboopossibility that European leaders have begun to discuss openlygiven the nation's political chaos. In other precious metals, silver was up 1.5 percent on the day at$27.55 an ounce, having fallen for eight days in a row, its longestlosing streak since a 10-day decline that began in late August2008, just before the global financial crisis claimed some of WallStreet's biggest banks. Platinum was up 1 percent at $1,439.20 an ounce, while palladiumrose 2.4 percent to $600.75 an ounce. (Additional reporting by Lewa Pardomuan; in SINGAPORE; Editing byAlison Birrane) Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. We are high quality suppliers, our products such as E-cig Cartomizers , Mini Electric Cigarette Manufacturer for oversee buyer. To know more, please visits Health Cigarette Lady Pipe.
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