Gold firmed Monday in thin US Holiday trade, with firmer stock markets and a recovery in the Euro from early lows taking some pressure off the precious Yellow metal.

The Euro edged above the near 17-month low it hit against the USD in early trade, while European stock markets swung into positive territory. Crude Oil prices tracked higher.

Spot Gold was up 0.1% at 1,641.59 oz at 1450 GMT, while US Gold futures for February delivery were up 11.20 at 1,642.00. Prices are + 5% so far this month.

EU stocks and the Euro recovered after falling in early trade after rating agency Standard & Poor's downgraded nine of the eurozone's 17 countries on Friday, with France and Austria losing their top-notch status. The EuroZone ratings downgrades are unlikely to shake up investors too much, as they were expected.

Gold's relationship to bad news on the eurozone debt crisis has been choppy over the past year, with the metal sometimes benefiting from fears over currency debasement, and sometimes falling victim to a rising dollar.

Gold is not a hedge against problems in the eurozone, at least as far as the debt situation is concerned. That may look different in the worst case scenario,

Talks between Greece and its creditor banks to cut back on its debt ended without agreement Friday. Greek Prime Minister Lucas Papademos said Monday he was confident a deal on a debt swap plan would be reached.

Money managers cut Bullish exposure in Gold futures and options in the week ended 10 January leaving net long positions at their lowest level in nearly 2 yrs, according to data from the US Commodity Futures Trading Commission

On the physical side of the market, Gold buying was quiet in main consumer India after the harvest festival season and as prices rose for a 2nd session.

The head of India's biggest jewellery retailer said Sunday that Gold jewelery demand in India was estimated to have risen 5 to 7% in Y 2011 and is set to grow a further 10 to 15% this year.

Jewelery sales in Italy, Europe's biggest Gold jewelery exporter, fell sharply in Y 2011 and were expected to remain depressed in Y 2012 as the debt crisis and the government's austerity measures hit consumer demand, senior industry officials said Sunday.

Silver was up 0.1% at 29.76 oz, broadly tracking Gold. Spot Platinum was + 0.8% at 1,491.49 oz, while spot Palladium was up 1.8% at 637.47 oz.

The Gold/Platinum ratio, which measures the number of Platinum oz needed to buy 1 oz Gold, stood at 1.11 Monday, up from 1.10 Friday, but well off the high of 1.15 it hit earlier this month.

Paul A. Ebeling, Jnr.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com