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Gold fell more than half a percent on Monday, trading just above $1,200 an ounce, as investors weighed whether a half a trillion euro plan couldsafeguard euro zone sovereign debt from default.European Union finance ministers agreed on Monday on emergency measures worth 500 billion euros ($670 billion) to prevent Greece's debt crisis causing turmoil in other euro zone countries.The measures are worth much more than any previous attempts by the 27-country EU or the 16-state single-currency group to calm what one minister described as the "wolfpack" of the financial markets.That sent the dollar down 1 percent against a basket of currencies as the euro rallied, but it was not enough to completely put investor worries to rest."Equities markets have gone crazy. We are up 2 percent in Australia with this collective sigh of relief about the EU plan. But we are still digesting," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney."The risk remains of contagion, but I think once Europe opens we'll see gold get smacked. The EU has finally gotten ahead of the market and done something. They realise contagion would be catastrosphic and 500 billion euros is a start."From a technical perspective, spot gold could retrace towards $1,185.28 or $1,178.65 -- the 50 and 61.8 percent Fibonacci retracement levels of the move from $1,157.20 to $1,213.35.For a graphic, click http://graphics.thomsonreuters.com/gfx/WT_20101005092829.jpgSpot gold tumbled more than $18 to a low of $1,195.20 an ounce from Friday's five month high of $1,213.35, according to Reuters data. At 0450 GMT, gold was quoted at $1,200.50 an ounce.U.S. June gold futures on the COMEX division of the NYMEX stood at $1,201.5 an ounce versus Friday's settlement of $1,210.40 an ounce."The market has been focused on euro zone plans for Greece and the early reaction was positive for riskier assets. This will mean a slowing in the surge in gold," Barclays Capital analyst Yingxi Yu said.But she added the market still wanted more clarity on the plans and beyond the short term, gold was likely to remain well supported.The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at a record high of 1,188.498 tonnes as of May 7, from 1,185.787 tonnes in the previous business day.For a graphic, click http://graphics.thomsonreuters.com/10/GLD_SPDR0510.gifPlatinum rose more than 1 percent, following last week's fall of of 4.8 percent while palladium jumped more than 2 percent to touch an intra-day high of $521.75 after sliding 7.5 percent last week."Platinum remains one of our favoured markets within commodities," Yu said."Fundamentals are constructive -- problems on the supply side are not fully appreciated by the market. Demand is strong ... and we expect the market to perform well over the coming months."(Editing by Ed Lane)(For more business news on Reuters Money visit http://www.reutersmoney.in)
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