Gold rose 1 percent on Thursday, boosted by a surprise interest rate cut by the European Central Bank and safe-haven buying amid an uncertain future for the European Union as Greece's government was on the brink of collapse.

Bullion is on track for its biggest gain in ten days, after data showed that U.S. service sector activity growth eased in October to its slowest in three months. Also supporting gold was financial uncertainty related to the demise of the now-defunct U.S. futures brokerage MF Global Holdings.

Even though gold has recently moved in sync with riskier assets, the metal -- a traditional safe haven -- rose as a faltering Greek government cast doubt on plans for a referendum on staying in the euro; and, as European leaders talked for the first time of a possible Greek exit to preserve the single currency.

It feels like we are back to square one with questions about Greecebacking out of the rescue plan and its possible ejection from the European Union. Expect the safe-haven angle to keep the entire precious group trading higher, said Miguel Perez-Santalla, vice president of Heraeus Precious Metals Management.

Spot gold was up 1.2 percent at $1,758 at 11:10 a.m. EDT (1510 GMT). U.S. gold for December futures was up $30.70 at $1,760.20.

Gold held gains after the ECB cut interest rates by a quarter point to 1.25 percent in a surprise move on Thursday and President Mario Draghi said the euro zone could subside into a mild recession in the latter part of 2011.

Spot silver eased 0.2 percent at $34.14. Platinum climbed 2.1 percent to $1,630.24, and palladium gained 1.3 percent to $654.91.