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PRECIOUS-Gold rebounds on flight to safety after Paris attacks
November 16, 2015 / 11:28 AM / 2 years ago

PRECIOUS-Gold rebounds on flight to safety after Paris attacks

* Gold rebounds from six-year low hit last week

* Paris attacks send euro to near-aeven-month low vs dollar (Updates prices, adds comment)

By Clara Denina

LONDON, Nov 16 (Reuters) - Gold rebounded on Monday from last week’s six-year low as the attacks in Paris prompted a bout of global risk aversion.

Spot gold rose as much as 1.4 percent to a 10-day high of $1,097.90 an ounce, with U.S. gold futures gaining more than 1 percent to a session high of $1,097.40.

In the first 10 minutes of Monday trade, nearly 3,000 lots changed hands, almost 10 times the 300-lot average for the opening 10 minutes over the past two months, Reuters’ calculations showed.

“Gold opened higher early this morning on the back of what happened over the weekend on perceived geopolitical risk, but it seems to be already short-lived because the bigger macroeconomic issues are the dollar’s strength and the (expected) U.S. rate hike,” Citi strategist David Wilson said.

Prices were up 0.2 percent at $1,085.81 at 1433 GMT.

“The metal is struggling to make it back above $1,100,” Saxo Bank senior manager Ole Hansen said.

Before Monday’s gains, gold had fallen for 12 sessions out of 13 on increasing bets that the Federal Reserve would raise U.S. interest rates next month, which would increase the opportunity cost of holding the non-yielding asset. It hit a near-six-year low of $1,074.26 on Thursday.

European shares steadied, although travel and leisure stocks slumped, while the euro was pinned near seven-month troughs against the dollar, as investors concerned about the economic impact on the euro zone from Friday’s Paris attacks steered clear of the common currency.

Gold is typically seen as a safe refuge during times of uncertainty. However, there has not been an increase in demand from retail investors since the Paris attacks, German coin dealer Degussa said in an emailed statement.

“(Buying was) already relatively high throughout last week, but the reason for that was clearly the most recent price drop,” it said.

Tracking gold, other precious metals all gained. Silver rose 0.2 percent to $14.27 an ounce, platinum was up 0.3 percent at $858.90 and palladium climbed 1.6 percent to $544.50. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Goodman)

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