US MIDDAY: gold rises two percent

Gold rose 2 percent on Monday and is on track for its first three-day winning streak in a month, as bullion appears to have regained its poise as a safe haven against global economic uncertainty after its worst monthly loss in two years. Bullion held gains even as Wall Street was off its initial lows after Greece warned it will miss deficit targets that were set to avoid bankruptcy. Gold rose despite signs of strength in the US economy after encouraging manufacturing data.
Gold has lost about 6 percent in the last nine sessions. Some analysts, however, said that gold's correction appeared to have run its course due to improving physical demand, particularly when the metal was rising in tandem with the US dollar. "We have the start of a new quarter, and gold prices typically respond very well toward the end of the year because of seasonal demand. That has attracted a lot of investors today," said Phillip Streible, senior market strategist at futures broker MF Global.
Spot gold was up 2 percent at $1,654.69 an ounce by 12:02 pm EDT (1602 GMT). US gold futures for December delivery were up $34.80 at $1,657.10 an ounce. The metal is set for its biggest daily rise in a month. Silver was up 3 percent at $30.80 an ounce, having earlier hitting $31.38. It fell by nearly 28 percent in September, its biggest one-month drop since the early 1980s.
Physical demand often peaks in the fourth quarter due to the Indian wedding season and Christmas, traditionally major gold buying events. Gold gained but was well off its record of above $1,920 an ounce set in early September, after being hit by a sharp margin increase and heavy bouts of liquidation by hedge funds.
Bullion's 20 percent fall from that record high has tempted physical consumers of the metal back into the market. Markets are closed in No 2 gold consumer China for a public holiday. But demand from other key gold-buying regions has picked up in the last couple of weeks, pushing Asian premiums to their highest since the start of the year. Among platinum group metals, platinum fell 1.2 percent to $1,506.24 an ounce, while palladium dropped 2.8 percent to near one-year lows at $592.75.