* Rebound in euro supports spot gold, U.S. futures
* Gold to rise to $1,563.56 -technicals
* Coming Up: U.S. Jobless claims Weekly; 1230 GMT
(Updates prices, adds WGC report on China)
By Lewa Pardomuan
SINGAPORE, May 17 Gold rose about 1 percent on
Thursday as bargain hunters resurfaced after prices tumbled to
another 4-1/2 month low in the previous session and the euro
rebounded, but gains could be limited by fears of a deepening
debt crisis in Greece.
Investors have unwound their bullish bets in gold, cashing
in the metal to cover for losses in other markets, after the
turmoil in Europe raised the spectre of a recession that
threatens to hurt the global economy.
Spot gold added $12.23 an ounce to $1,550.53 by 0618
GMT, after rising to a high of $1,553.36 earlier, as the euro
regained strength following a drop to a four-month low on
Wednesday. Bullion plunged to $1,527 - its weakest since Dec. 29
- on Wednesday.
"For now, we could see some buying on dips below $1,550. The
situation in Greece seems uncertain and the outcome could turn
the markets either way," said Lynette Tan, an analyst with
Phillip Futures in Singapore.
"Investors are currently trading cautiously and we expect
gold to be range trading. For now, it's probably between $1,500
U.S. gold futures hit a high of $1,553.7 an ounce
and was at $1,550.60, up $14.00. The contract had plunged to a
multi-month low of $1,526.70 on Wednesday.
Gold, traditionally a safe-haven asset, has been moving in
tandem with riskier assets such as equities, industrial metals
and oil this year, as investors turn to the safety of the
But in China, gold demand hit a record high in the first
quarter on investor worries over inflation and property market
curbs, the World Gold Council said on Thursday, bucking a lower
trend in global consumption driven by higher gold prices.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.5 percent on short covering, after
sliding more than 3 percent - its biggest one-day drop in six
months - in the previous session.
But fears of contagion spreading to other stressed euro
zone economies lingered after the European Central Bank said it
has stopped providing liquidity to some Greek banks as they have
not been successfully recapitalised.
IMF chief Christine Lagarde warned of "extremely expensive"
consequences if Greece were to leave the euro zone, a once taboo
possibility that European leaders have begun to discuss openly
given the nation's political chaos.
"Austerity is imposing intolerable unemployment and
political chaos in Greece, and won't permit it to repay its
debts. Athens must abandon the euro and reintroduce the
drachma," said Peter Morici, an economist at the University of
"For austerity and debt restructuring to work, Greece must
generate new exports and curb imports to accomplish trade
surpluses and earn euro to begin paying off its remaining debt."
Precious metals prices 0618 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1550.53 12.23 +0.80 -0.85
Spot Silver 27.71 0.57 +2.10 0.07
Spot Platinum 1444.44 19.24 +1.35 3.69
Spot Palladium 604.50 17.55 +2.99 -7.36
COMEX GOLD JUN2 1550.60 14.00 +0.91 -1.03 16395
COMEX SILVER JUL2 27.67 0.47 +1.72 -0.90 5175
COMEX gold and silver contracts show the most active months
(Editing by Himani Sarkar)