* Euro zone ministers agree support plan for Greece with IMF
* Commodities rise as risk appetite recovers
* SPDR gold ETF reports second inflow this week
(Updates prices)
By Jan Harvey
LONDON, March 26 (Reuters) - Gold rose towards $1,100 an
ounce in Europe on Friday as the euro rebounded against the
dollar after euro zone leaders agreed to create a financial
safety net with the IMF for debt-laden Greece.
Commodities rose almost across the board as the news boosted
appetite for assets seen as higher risk.
Spot gold <XAU=> was bid at $1,097.25 an ounce at 1256 GMT,
against $1,090.35 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange rose $4.20 to $1,097.10 an ounce.
"The dollar has weakened again, and that has given metals a
lift," said Citigroup analyst David Thurtell. "Risk is being
bought again."
The metal is also benefiting from chart support, he said.
"$1,091 is a significant Fibonacci level," he said, referring to
key technical support lines. "It looks like that has held."
The euro recovered from a 10-month low after euro zone
leaders agreed on a safety net for Greece which included the
IMF, and the dollar backed off a two-month peak on the yen as
Japanese exporters sold into its gains. []
Weakness in the U.S. unit usually boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Euro zone leaders agreed on Thursday to create a joint
financial safety net with the International Monetary Fund to aid
heavily-indebted Greece and to try to restore confidence in the
single currency after weeks of wrangling. []
"The EU agreement means that no money will be forthcoming
immediately, but at least there will be a back stop should
Greece have financing difficulties over coming weeks," said
Credit Agricole in a note.
TEMPORARY SUPPORT
However, any support the deal lent to the euro may be
temporary, it added.
"The fact Greece will have to borrow money only at market
rates, ongoing worries about other EU countries' fiscal problems
and ECB President Trichet putting somewhat of a dampener on
sentiment by criticizing IMF involvement in the deal (have) kept
the euro under pressure."
Other commodities also benefited from the news, with base
metals ticking higher and oil climbing 0.7 percent, both lifted
by the EU aid plan. [] []
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, rose 4.568 tonnes on
Thursday to 1,124.647 tonnes, their highest since Jan. 5. It
rose by the same amount on Tuesday.
"An increase in ETF holdings showed gold still attracted
investors as currencies remained volatile," said Richcomm Global
Services in a note.
In Asia, jewellers chased gold bars after bullion prices
dropped more than $10 this week, while main consumer India was
stocking up as the wedding season begins again in April, dealers
said on Friday. []
Gold has seen good physical demand emerging as prices
declined below $1,100 an ounce, dealers said, helping put a
floor on prices.
Among other precious metals, silver <XAG=> was at $16.87 an
ounce against $16.56, while platinum <XPT=> was at $1,598 an
ounce versus $1,597 and palladium <XPD=> at $454 against
$450.50.
(Editing by Sue Thomas)
