Gold rises to near $1,190/oz on euro zone debt fears

Gold rose 1.2 per cent to near $1,190 an ounce in Europe on Monday, recovering some of last week's losses, as lingering concerns over euro zone sovereign debt levels supported the metal as a safe store of value.

Fears over a potential default by debt-laden Greece, which took gold to record highs earlier this month, have receded since the International Monetary Fund and euro zone countries unveiled a multi-billion euro aid package, but tensions remain high. Holdings of the world's largest gold exchange-traded fund, New York's SPDR Gold Trust, are still at record levels despite last week's price correction, fuelling expectations investors are buying the metal as a long-term haven from risk. Spot gold was bid at $1,189.15 an ounce at 0813 GMT, against $1,175.15 late in New York on Friday. US gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $13.40 to $1,189.50 an ounce. The euro fell 0.5 per cent against the dollar on Monday as the single currency's short-covering rally of last week ran out of steam, with investors continuing to cut risk in their portfolios. Palladium was at $447 against $433.50, off a high of $453, while platinum was at $1,522 against $1,504.50. Silver was bid at $17.95 an ounce against $17.59.