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14

Gold Rises 1%

Gold rose more than 1 percent in Asia on Monday as investors scoured for safe havens amid fresh government efforts to calm turmoil

Gold rose more than 1 percent in Asia on Monday as investors scoured for safe havens amid fresh government efforts to calm turmoil.

Australia's central bank stepped into currency markets in European trade on Friday to support the local currency, while the U.S. was bracing for an interest rate cut later this week.

In an emergency meeting, South Korea slashed its official rate 75 basis points percent.

"We're seeing some follow through interest in gold today which has more to do with reaction to all the events going on than the metal," said a bullion dealer in Sydney.

Spot gold was quoted at $739.40 an ounce at 0145 GMT versus $731.50 late in New York on Friday.

Merrill Lynch in a report cut its average gold price forecast for 2008 by 2.7 percent to $885 an ounce. Gold sold for a record $1,030.80 on March 17.

U.S. gold futures for December delivery GCZ8 rose $7.20 to $737.50 an ounce, after falling below $700 last week.

The U.S. Federal Reserve is expected to cut lending rates at a two-day policy meeting this week in response to unprecedented turmoil in financial markets. The consensus among Fed watchers is for a half-point cut in overnight rates to 1 percent.

Author: Jo Amey