Gold rises on Slovakia deal, European optimism

(Reuters) - Gold rose on Wednesday in tandem with riskier assets, as the dollar fell on hopes the euro zone debt crisis will be contained after Slovakian parties reached a deal on plans to boost the region's bailout fund.

Bullion moved in tandem once more with U.S. stocks and industrial metals, gaining after Slovakian lawmakers said they would approve a plan to expand the powers and size of the European EFSF rescue fund.

The precious metal has risen 2.5 percent in the past three sessions, lifted by optimism about a plan to tackle Europe's debilitating crisis, which prompted gold -- a traditional safe haven -- to move in sync with equities and commodities.

"Investors are less concerned that what's going on in Europe will develop into some type of Lehman event," said Leo Larkin, metals equity analyst at S&P Capital IQ.

"As long as people are confident that gold is not going to be sold off in panic, it can continue to go higher."

Spot gold was up 0.8 percent at $1,678.69 an ounce by 11:50 a.m. EDT.

Full story here.

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