* China announces $600 bln stimulus plan; G20 meet in Brazil
* Oil rises, industrial metals surge, dragging gold higher
* Dollar weakens against euro as risk appetite improves
(Recasts, adds comment, changes dateline, pvs TOKYO)
By Jan Harvey
LONDON, Nov 10 (Reuters) - Gold rose 2 percent in Europe on
Monday, lifted by gains across commodities after China announced
a $600 billion economic stimulus package, and by weakness in the
dollar against the euro.
Spot gold <XAU=> hit a peak of $753.10 an ounce, before
easing to $751.80/753.30 by 1021 GMT, against $735.95 late in
New York on Friday.
Oil climbed more than $2 a barrel and base metals prices
surged after the Chinese announcement, boosting interest in all
commodities, traders said.
"The stimulus package from China has allowed other
commodities to perform better, (and) gold is following the other
metals," said Deutsche Bank trader Michael Blumenroth.
"The euro-dollar price is also a better influence at the
moment," he added.
China launched a huge stimulus plan on Sunday, pledging
nearly $600 billion in extra spending, or roughly 15 percent of
this year's GDP. The money is to be spent by the end of 2010.
[]
"The bulk of the money will go towards infrastructure
projects," said Standard Bank analyst Walter de Wet. "Equity
markets, currency markets and commodity markets in Asia reacted
favourably to this news this morning."
Meanwhile at a G20 meeting in Brazil, finance ministers and
central bankers representing 90 percent of the world's economy
said they will take "all necessary measures" to normalise the
financial markets and counter the backlash to the credit crisis.
[]
The dollar weakened against the euro as risk appetite
improved. A recovery in the stock markets prompted investors to
move into higher-yielding currencies such as the euro and the
yen. []
Asian stocks and commodities also jumped as risk aversion
eased after the announcement from China.
Copper surged 8 percent, nickel more than 10 percent and
zinc and lead around 6 percent each following the news, clawing
back a little of the substantial ground they have lost in recent
months. []
OIL GAINS
Oil also rallied, climbing 4 percent a barrel to above $163
a barrel as traders hoped the Chinese stimulus package would
benefit demand. []
Firmer crude prices tend to benefit gold because the
precious metal is often bought as a hedge against oil-led
inflation, and because they support interest in commodities as
an asset class.
Among other precious metals, silver <XAG=> tracked gold
higher to $10.30/10.38 an ounce from $9.99.
Platinum prices climbed more than 3 percent as fears abated
that the demand picture for industrial precious metals will
continue to worsen.
The white metal is also being helped by fresh fears over
supply after major producer Anglo Platinum <AMSJ.J> said last
week it may lose up to 200,000 ounces of output this year due to
a smelter shut-down.
However, all the platinum group metals remain well off highs
after posting sharp losses in recent months on waning demand
from carmakers, who account for more than 50 percent of PGMs
consumption.
"Platinum continues to consolidate having broken out of the
steep down-channel on the charts, in place since mid-July," said
James Moore, an analyst at TheBullionDesk.com.
"But, with gold and silver showing signs of slippage the
white metal is at risk of another test lower in the coming
session, potentially dragging the metal back below $800/oz."
Spot platinum <XPT=> rallied to a high of $875 an ounce,
before easing to $861.50/881.50, against $845. Its sister metal
palladium <XPD=> was at $226/231 an ounce against $220.
(Reporting by Jan Harvey; editing by Editing by Peter
Blackburn)
