PRECIOUS-Gold rises over 1 pct on Greek deal uncertainty

(Updates with comment, market activity)
* Gold rallies as Greek deal increases economic uncertainty
* Oil rally spurs inflation worries, China, Fed easing
supportive
* Silver up despite drop in Chinese imports
* Coming up: U.S. existing home sales Tuesday

By Frank Tang and Amanda Cooper
NEW YORK/LONDON, Feb 21 (Reuters) - Gold rose more
than 1 percent on Tuesday, breaking ranks with the
euro and equities, as a massive European bailout deal had
investors buying the metal amid doubts the bailout will work.
Gold rallied to its highest in more than two weeks after
euro zone finance ministers agreed a 130-billion-euro ($172
billion) rescue for Greece. Analysts said the deal bought time
for the single-currency bloc but left deep doubts about Greece's
ability to recover and avoid default.
Bullion has benefited from news that China recently cut its
required reserve ratio and committed to help the euro bloc. The
metal already received a strong boost after the U.S. Federal
Reserve last month said it would keep rates near zero at least
until late 2014.
"Gold gets a boost from the EU kicking the can down the
road," said Rob Kurzatkowski, senior commodity analyst at
optionsXpress.
"Not only does the bailout perhaps delay the inevitable
(Greek bankruptcy), but it also opens the door for higher
inflation across the euro zone," he said.
Spot gold rose 1.3 percent on the day to $1,755.81 an
ounce by 3:01 p.m. EST (2001 GMT), having earlier hit a high of
$1,757.40, the loftiest price since Feb. 3.
Bullion posted its biggest one-day gain in two weeks.
A near $3 rally in U.S. crude futures to nine-month highs
amid possible supply disruptions due to rising tensions between
Iran and the West also boosted gold's inflation hedge appeal.

U.S. COMEX April futures settled at $1,758.50 an
ounce, up $32.60 from Friday's close as traders returned after
Monday's U.S. Presidents Day holiday.
Analysts said gold outperforming the U.S. stock markets and
other riskier assets highlighted underlying inflation worries
and lingering doubts on Greece's ability to avert a chaotic
default in the long run. Both the S&P 500 and euro traded in the
negative territory.
However, gold could face strong headwinds as liquidity
appears to tighten for European banks soon.
The European Central Bank wants its second offer of cheap
ultra-long funds next week to be its last, putting the onus back
on governments to secure the euro zone's longer-term future.

GOLD-EURO CORRELATION
The positive 30-day log correlation between gold and the
euro has risen to near 0.5 up from 0.3 last week, indicating a
stronger positive link between the two.
"Gold is trading more like the other metals - as a risk
asset, rather than a risk hedge," Citigroup analyst David Wilson
said.
Even though gold has at times failed to rally in response to
euro zone debt fears, investors have snapped up almost as much
of the metal through exchange-traded products so far this month
as they did in the whole of January.
Holdings of gold in the world's major ETPs are set for a
rise of more than 600,000 ounces so far in February, marking a
second straight month of net inflows.
Silver was up 2.2 percent at $34.29 an ounce,
shrugging off a decline in imports by China.
Chinese imports of silver fell to 191.7 tonnes in January,
the lowest in three years. In 2011, China imported a total of
3,575 tonnes of silver, the lowest in four years.
Platinum rose by 2.6 percent on the day to $1,682.74
an ounce, having earlier hit $1,687.50, a five-month high.
Platinum prices have been boosted by supply worries in South
Africa.
Palladium rose 2.0 percent to $705.35 an ounce.

3:01 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1758.50 32.60 1.9 1727.00 1759.50 184,493
US Silver MAR 34.429 1.213 3.7 33.325 34.465 56,697
US Plat APR 1684.90 51.00 3.1 1639.90 1693.60 11,608
US Pall MAR 710.75 22.65 3.3 687.50 714.75 6,772

Gold 1755.81 22.29 1.3 1731.90 1757.40
Silver 34.290 0.730 2.2 33.510 34.440
Platinum 1682.74 42.92 2.6 1646.00 1687.50
Palladium 705.35 13.57 2.0 696.63 711.00

TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 197,868 197,570 195,199 20.38 0.80
US Silver 77,842 48,723 43,653 30.42 -1.63
US Platinum 11,720 7,644 7,655 21.27 0.03
US Palladium 8,933 4,187 4,151

(Editing by Bob Burgdorfer and Marguerita Choy)