Gold rises 1 pct as year-end jitters knock stocks, dollar

London (Dec 30) Gold rose 1 percent on Tuesday as the dollar weakened and stock markets slid, with concerns over tension between Russia and the West also helping push the metal through key chart levels, triggering fresh buying.

Spot gold rose as high as $1,200.70 an ounce and was up 1.2 percent at $1,197.30 an ounce by 1434 GMT. U.S. gold futures for February delivery were up $15.00 an ounce to $1,196.90.

A wave of risk aversion swept through global markets on Tuesday, with end-of-year caution and worries about Greece's future in the euro zone pushing European shares down 0.7 percent. A drop in oil prices also hurt sentiment.

Among currencies, the dollar index fell 0.3 percent, pressured by strength in the yen as investors sought the traditional safety of the Japanese currency amid end-of-year nerves over economic risks ahead.

"Gold... has been on something of a roller coaster for the past few days," Ed Meir, an analyst at INTL FCStone, said. "We suspect that the dollar weakening against the yen may have triggered some buying and also equity weakness, particularly in many emerging markets."

Gold traders said the metal was also being lifted by concerns over tensions between Russia and the West. Russia's Foreign Ministry said on Tuesday that a widening of U.S. sanctions against Moscow this week may hamper bilateral cooperation on some issues.

"Gold was heavily bid at the opening of the Comex... up to a high of $1,202.80 on the Feb 2015 contract as it hit a flurry of stops above 1190 and 1200 in shallow liquidity," one London-based trader said. "News (from Russia) is also attracting fresh buyers."

For the year, gold is down about 1 percent, hurt by a stronger dollar and expectations of an interest rate rise in the United States.

Gold slumped 28 percent in 2013 as investor demand waned on the back of a robust U.S. economy and better-yielding stocks. Many analysts have forecast more declines in gold prices.

Some physical buying in China helped to support gold prices. Premiums in Shanghai were steady at about $4 an ounce on Tuesday.

Silver was up 1.4 percent at $16.00 an ounce while spot platinum gained 0.9 percent to $1,203.75 an ounce and spot palladium rose 0.2 percent to $807 an ounce.

Source: Reuters