* Gold rises over 1 pct on firm euro and oil
* Investors expect more rate cuts by major central banks
* U.S. presidential election may also set tone for dollar
* Shares in Asia up on signs of improvement in credit
market
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Nov 3 (Reuters) - Gold gained more than 1
percent on Monday, having posted its biggest monthly decline in
a quarter century in October, as safe-haven buying resurfaced
after the euro firmed against the U.S. dollar and oil reversed
losses.
But investors may be careful about taking large positions
ahead of another round of interest rate cuts this week by the
major's major central banks and Tuesday's U.S. presidential
election, which could set the tone for the dollar and gold.
Spot gold <XAU=> was trading at $733.55 an ounce, up $10.50
from New York's notional close on Friday, when it dropped more
than 2 percent after a strong dollar and recession fears
prompted investors to shift to less volatile assets.
"Currencies are likely to be affected by rate announcements
and gold probably will react to that," said Adrian Koh, analyst
at Phillip Futures in Singapore.
"For early week, it's definitely focused on the U.S.
elections and I think this one should be bullish on the equity
markets at least, but for gold, we will have to see how the
dollar pans out," he added.
Gold lost 17 percent in October, its biggest decline since
February, 1983, when it finished the month 18.2 percent lower.
Bullion is down 12 percent this year, well below the recordhigh
of $1,030.80 an ounce struck in March.
The euro firmed to $1.2845 <EUR=>, having lost about 9.6
percent in October -- its worst monthly performance since its
1999 launch. The dollar posted its biggest annual monthly gains
against a basket of currencies in more than 17 years on Friday.
The European Central Bank, the Bank of England and the
Reserve Bank of Australia are expected to lower rates to
support their struggling economies from the threat of a global
recession. []
"It appears the systemic risk that supported gold through
the heat of the credit crisis has been alleviated somewhat by
the action of the world's central bankers, however, it has not
totally vanished," UBS analyst Glyn Lawcock said in a report.
"The risks in the global financial markets are a clear and
present danger and subsequently, gold and gold equities will be
of interest to a number of investors," he said.
Oil <CLc1> rose more than $1 on Monday, reversing earlier
losses of more than $1 after Asian stock markets climbed on
signs of improvement in credit markets. []
"I guess everyone will be watching the results of the U.S.
elections but I am not sure how it will actually affect the
markets," said Koh of Phillip Futures.
Democrat Barack Obama and Republican John McCain raced
through the battleground states of Ohio and Pennsylvania on
Sunday, with McCain struggling to overtake Obama's lead in the
final 48 hours of a grueling White House campaign.
[]
New York gold futures <GCZ8> rose $16.5 an ounce to
$734.7.
Precious metals prices at 0547 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 733.55 10.50 +1.45 -11.91
Spot Silver 10.09 0.28 +2.85 -31.69
Spot Platinum 822.50 9.50 +1.17 -45.89
Spot Palladium 195.50 2.00 +1.03 -46.88
TOCOM Gold 2299.00 -150.00 -6.12 -24.87
48451
TOCOM Platinum 2450.00 -300.00 -10.91 -54.11
16869
TOCOM Silver 286.00 -37.70 -11.65 -47.13
1113
TOCOM Palladium 609.00 -48.00 -7.31 -54.92
851
Euro/Dollar 1.2853
Dollar/Yen 99.33
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by James Regan in Sydney)
(Editing by Kim Coghill)
