LONDON - Gold prices rose in Europe as the euro recovered early losses to firm versus the US dollar, with the yellow metal also benefiting from strength in other commodities such as oil and copper. Silver meanwhile climbed to its highest since early February at $US16.73 an ounce, lifted by gains in industrial metals. Spot gold was bid at $US1,120.40 an ounce at 2052 AEDT, against $US1,116.20 late in New York on Friday. US gold futures for April delivery on the COMEX division of the New York Mercantile Exchange rose $US2.20 to $US1,121.30 an ounce. "There is a combination of factors here," said Wolfgang Wrzesniok-Rossbach, head of sales at precious metals house Heraeus. "The most important driving force for gold is the euro/dollar...and we also have relatively strong oil prices. "There is some physical demand around, and also the financial situation in the Mediterranean, in Greece and elsewhere, is still open." "People don't know what is going to happen, so they are buying gold as a safe haven." The euro turned higher versus the US dollar on Monday, recovering early losses, as signs emerged that a support deal for Greece may be near. Fears over the country's fiscal health have kept the pressure on the single currency this year. European Central Bank Executive Board member Juergen Stark was in Athens on Monday with the European Union's Economic Affairs Commissioner Olli Rehn to meet Greek officials on the country's fiscal crisis. Gold is heavily influenced by moves in the dollar, with weakness in the US unit boosting its appeal as an alternative asset and making dollar-priced commodities cheaper for holders of other currencies. Foreign exchange traders will be eyeing key US data due later in the day, including January personal spending numbers and the Institute for Supply Management's manufacturing index for February, for its possible impact on currencies. Sterling-priced gold hits record Gold priced in sterling rose to a record £741.19 an ounce as the British currency fell after an opinion poll showed a risk that no party will win an overall majority in the country's next general election in June. "Gold is far from its highs in US dollar terms made back in early December of last year, but is at those highs in sterling terms, and is putting those highs to test in euro and Swiss franc terms," editor of the Gartman Letter trading note Dennis Gartman said. "Had one been long of gold in dollar terms from the highs in December one would still be "down" 8.5 per cent, but in terms of European currencies one would be essentially unchanged." In supply news, Gold Fields, the world's number four gold producer, said South Africa's National Union of Mineworkers (NUM) has threatened an indefinite strike at its operations in the country over safety procedures. Gold also benefited from strength in other commodities. Oil prices rose more than one per cent to above $US80 a barrel as threats Iran may cut off energy supplies to Europe fuelled buying, while copper rose nearly five per cent to its highest since January after a massive earthquake hit Chile. The gains in industrial metals helped silver prices to rise, analysts said. "Silver opened around 20-cents higher in Asia this morning as a result of the Chile related copper gains," analyst at TheBullionDesk.com James Moore in a note. Holdings of the world's largest silver exchange-traded fund, the iShares Silver Trust, rose 30.51 tonnes on Friday to 9,476.91 tonnes, the trust said. Spot silver was bid at $US16.61 an ounce against $US16.44, platinum was at $US1,552.50 an ounce against $US1,540, and palladium was at $US436.50 against $US430.

Source