* Euro recovers from 1-yr low to hit session high vs dollar
* Germany said ready to contribute to Greek aid
* Gold-dollar link seen weakening throughout 2010
(Updates prices, adds detail, comment)
By Jan Harvey
LONDON, April 23 (Reuters) - Gold rose more than 1 percent
on Friday to a session high of $1,154.35 an ounce as the dollar
extended losses against the euro after Germany said it was ready
to make a contribution to Greek aid.
Germany's finance minister said the country is ready to make
its contribution to an aid package for Greece if the
International Monetary Fund, the EU Commission and the European
Central Bank decide Athens needs the help. []
Spot gold <XAU=> was bid at $1,152.55 an ounce at 1503 GMT,
against $1,140.45 late in New York on Thursday. U.S. gold
futures for June delivery <GCM0> on the COMEX division of the
New York Mercantile Exchange rose $10.80 to $1,153.70 an ounce.
The Greek debt crisis can be viewed as both positive and
negative for gold, as it tends to pressure the euro, which is
negative for dollar-priced commodities, but boosts interest in
bullion as a haven from financial risk.
"The currency aspect (of the gold market) is more short
term," said VM Group analyst Matthew Turner. "If there is a
bailout, the euro will rise and gold will rise in dollars, and
if the situation gets worse, we will see gold under pressure."
"But in the medium term, this uncertainty is good for gold,
even though it is bad for the euro. As there doesn't seem to be
a quick solution to the problem, it is something that will keep
gold supported over the rest of the year."
Gold priced in euros <XAUEUR=R> rose to a peak of 863.67
euros an ounce after the news, close to the record high of
864.75 euros an ounce it reached earlier this month.
The link betweek the dollar and gold has weakened in 2010,
with gold prices rising 4 percent since the start of the year
despite the dollar's 7 percent climb versus the euro.
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For a graphic showing gold's correlation to the euro/dollar
exchange rate, click on: http://link.reuters.com/ham96j
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RISK APPETITE IMPROVES
Prices also received a boost after above-consensus U.S. new
homes data lifted appetite for assets seen as higher risk, like
the euro and commodities. Concern over Greece pushed the single
currency to one-year lows in earlier trade. []
Among other commodities, oil prices rebounded as the euro
recovered, having earlier weakened as Greece's request for
financial aid failed to soothe nerves over the outlook for the
beleagured eurozone member. []
Wall Street stocks added to gains after data showed sales of
newly built single-family homes rebounded strongly in March to
their highest level in eight months. []
Barclays Capital analyst Suki Cooper said gold is benefiting
from better appetite for the metal among short-term investors,
adding she expects gold's relationship to the euro-dollar to
weaken as the year progresses.
"Other concerns, like inflation and sovereign debt risk,
will come into play more, and we will see investors turning to
gold," she said.
Silver <XAG=> was at $18.14 an ounce against $17.95,
platinum <XPT=> at $1,736 an ounce against $1,740, and palladium
<XPD=> at $560 against $561.
Autocatalyst materials platinum and palladium are succumbing
to profit taking, dealers said. Their gains have outstripped
those of other precious metals this year amid expectations car
demand will rise after last year's slump.
(Editing by William Hardy)
