Gold climbs 1 pct on weak shares, euro zone concerns

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Gold rose one percent on Monday as global shares fell on concerns over the future of Greece in the euro zone and lower oil prices, while buying from top consumer China picked up ahead of the Lunar New Year.

Spot gold rose to a session-high of $1,201.30 an ounce in earlier trade and was up 0.9 percent at $1,199.70. It fell to a one-month low of $1,168.25 on Friday, before recovering on lower equities.

U.S. gold futures for delivery in February rose as much as 1.3 percent to $1,202.20 an ounce.

The metal was underpinned by lower European shares due to political uncertainty in Greece ahead of elections later this month, while Wall Street fell one percent due to crude prices at new 5-1/2-year lows.

"What's happening in the euro zone, particularly concerns over a possible default by Greece ... is contributing to an element of short-covering or indeed some safe-haven buying of gold, particularly in euros," Mitsubishi Corp metals strategist Jonathan Butler said. "That is probably helping offset the strength in the dollar."

Gold in euro terms rose to its highest since September 2013 at 1,007.47 euros an ounce.

Meanwhile, Chinese buying has picked up in recent weeks ahead of the Lunar New Year holiday, when gold is bought for gifts. Demand is likely to stay strong until the holiday in February.

Demand from buyers in China was reflected in higher premiums to London gold prices. Prices on the Shanghai Gold Exchange were around $7 an ounce higher than the global benchmark. Premiums were around $4 to $5 last week.

Gold's gains defied a stronger dollar, up 0.4 percent against a basket of major currencies, hitting a nine-year high versus the euro, due to prospects of more monetary easing by the European Central Bank.

Conversely, the U.S. Federal Reserve minutes on Wednesday will be picked through for clues on the timing of interest rates hikes.

A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies, while higher interest rates would encourage investors to put money into interest-bearing assets like stocks and bonds.

Among other precious metals, silver rose 2.5 percent at $16.15 an ounce, while platinum was up 0.9 percent at $1,211 an ounce and palladium gained 1.2 percent to $796.00 an ounce.