Gold rises 1pc on Europe prospects

LONDONSINGAPORE, Oct 24 (Reuters): Gold rose more than 1 per cent Monday, as European leaders edged towards a solid plan to resolve the euro zone debt crisis and signs that China's economy is in better shape than feared. In recent weeks gold prices have followed moves in riskier assets, with the precious metal's safe-haven appeal diminishing after wild price swings in the past quarter. Gold gained along with other commodities and world stocks. Spot gold rallied more than 1 per cent to $1,658.55 an ounce and was at $1,656.90 by 1118 GMT, after falling more than 2 per cent last week. US gold rose more than 1.4 per cent to $1,660.5 before easing to $1,656. "The equity markets are rising, the rest of commodities are rising, but the gold price is not coming under pressure. It's also probably pointing to the possibility that the situation could again become critical," Commerzbank analyst Eugen Weinberg said. Some progress was made in Brussels over the weekend, with agreements near on bank recapitalisation and on how to leverage the European Union's EFSF rescue fund to try to stop bond market contagion. But final decisions were deferred until a second summit Wednesday and sharp differences remain over the size of losses private holders of Greek government bonds will have to accept. The euro retreated from a six-week high against the dollar. "Gold popped up this morning along with most of the commodities markets. The beginning of the EU debt resolution has had a strengthening effect on commodities and equities as a whole," Credit Suisse analyst Tom Kendall said.