* Gold rises 2 pct as dollar extends falls versus euro
* Buying temporary, uncertainty over global economy remains
By Risa Maeda
TOKYO, Nov 10 (Reuters) - Gold rose about 2 percent on Monday
as a fall in the dollar against the euro increased the yellow
metal's appeal as an alternative asset, but further buying was
capped by uncertainty over the global economic outlook.
Investors mostly stayed on the sidelines ahead of a meeting
next weekend of world leaders to discuss precisely what measures
they need work out in the coming months, analysts said.
Spot gold <XAU=> stood at $749.50 an ounce as of 0631 GMT, up
2 percent from a notional close in New York of $734.80 on Friday.
It earlier rose as high as $753.00, a level last marked on
Thursday.
But buying has withered since the euro came off an earlier
high near $1.29 <EUR=>, dragged down by expectations of more
interest rate cuts to support the regional economy. It was up
about 1 percent at $1.2860 <EUR=>.
"Gold's early jump to $750 came as a result of one-off
stop-loss unwinding of short gold and long dollar (against the
euro) positions," said a manager at a Japanese trading firm,
adding that activity other than such technical moves remained
low.
"Money inflows are drying up, in particular from speculative
investors," he said.
China launched a huge stimulus plan on Sunday worth nearly
$600 billion, marking what could be the start of a round of big
spending or interest rate cuts by leading economices to stave off
a recession in many countries. []
A rally in Asian shares largely reflected hopes that China's
spending plan could offset slowing economies in the United States
and Europe and eased fears that a global recession would contain
demand for gold.
Another bright spot was a recovery in oil prices, which often
move in the same direction as gold.
U.S. crude oil futures <CLc1> rallied more than $3 to above
$64 a barrel, fuelled by top exporter Saudi Arabia's plans to cut
December supplies to Asia. []
But buying was not aggressive enough to push gold above $760
an ounce, analysts said.
"It looks like gold is being lifted by the same type of
temporary optimism we saw on Nov. 4 and 5," said Kaname Gokon,
deputy general manager at Okato Shoji Co.
Gold rose as high as $768 last week as investors moved to
commodities and stocks, relieved that the U.S. presidential
election on Nov. 4 had gone smoothly.
"But uncertainty still hangs over us going forward," Gokon
said, adding that gold could test $700 if it breaks below $720.
COMEX gold futures rallied in Asia after rising $2 in New
York on Friday. The most active December contract <GCZ8> was
trading at $749.4 per ounce, up 2.1 percent from the New York
settlement on Friday.
The benchmark October contract on the Tokyo Commodity
Exchange <0#JAU:> rose 59 yen per gram to 2,386 yen.
Spot platinum <XPT=> was little changed at $841.0 an ounce,
compared with $839.50 in New York.
Silver <XAG=> stood at $10.19 an ounce, up from $9.94 in New
York. But palladium <XPD=> fell to $221 an ounce, down 1.8
percent from $225.
Precious metals prices at 0632 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 748.50 13.70 +1.86 -10.11
Spot Silver 10.19 0.25 +2.52 -31.01
Spot Platinum 838.50 -1.00 -0.12 -44.84
Spot Palladium 221.00 -4.00 -1.78 -39.95
TOCOM Gold 2383.00 56.00 +2.41 -22.12 31697
TOCOM Platinum 2674.00 -37.00 -1.36 -49.92 15002
TOCOM Silver 323.80 3.90 +1.22 -40.15 510
TOCOM Palladium 709.00 -9.00 -1.25 -47.52 702
Euro/Dollar 1.2831
Dollar/Yen 98.92
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Editing by Edwina Gibbs)
