(REUTERS) -- Gold prices climbed on Monday as news that Greece's parliament had approved an austerity bill needed to release a second round of bailout funds lifted the euro, while platinum rose back towards a three-month high as supply issues flared up.

Spot gold was up 0.7 percent at $1,731.60 an ounce at 1302 GMT (10:02 a.m. EST), while U.S. gold futures for February delivery were up $8.60 an ounce at $1,733.90.

The euro rose 0.6 percent against the dollar on relief that Greek leaders had approved the austerity package, though investors were skeptical about the strength of the euro's gains with more hurdles left to be cleared.

While the Greek parliament has ratified the austerity measures, some uncertainty still remains, for instance regarding the demand for a clear commitment that all the members of the coalition government stick to the agreement, said Anne-Laure Tramblay, an analyst at BNP Paribas.

Greece's politicians struggled last week to reach a deal on painful austerity reforms demanded by the European Union and International Monetary Fund in exchange for a 130 billion euro bailout. The measures sparked violent protests in Athens.

Although gold prices have rallied more than 10 percent this year, they have tended to react negatively in the short term to signs of more stress in the euro zone, tracking the losses in the euro and stocks which have tended to follow bad news.

However, on a longer term view, the precious metal is still receiving some support from uncertainty over the euro zone situation, analysts said.

The defensive nature of gold should continue to support investment demand as investors look for safe havens, said Morgan Stanley in a note on Monday. A continued low or negative real interest rate environment will also provide support.

Gold has made significant gains this year on the back of loose monetary policy in the United States and elsewhere, which cuts the opportunity cost of holding the precious metal.

MONEY MANAGERS RAISE NET LONGS

Money managers in gold and silver futures and options raised their net long position in the week of February 7, data from the U.S. Commodity Futures Trading Commission showed on Friday.

The price is currently also finding support from money managers who in the week to February 7 expanded their net long positions in gold 8 percent to a 5-month high of 155.6 thousand contracts, Commerzbank said in a note.

This has once again given rise to a certain potential for correction should the optimism of financial investors abate.

On the physical markets, gold traders in major consumer India said demand was soft as buyers anticipated more price falls. India and China between them account for more than 50 percent of annual gold fabrication demand.

Silver was up 0.9 percent at $33.86 an ounce. Spot platinum was up 1.4 percent at $1,662.50 an ounce, while spot palladium was up 0.3 percent at $702 an ounce.

Platinum rose as high as $1,665 in earlier trade, just a few dollars short of a three-month high it reached last week.

It has been supported by concerns about supply from South Africa, source of three-quarters of the world's platinum.

Anglo American Platinum (AMSJ.J), the world's largest producer of the precious metal, said on Monday output would likely be flat in 2012 after it fell short of its target last year due to a spike in safety stops.

Number two producer Impala Platinum said it was unlikely to restart its Rustenberg operations, where it has been losing 3,000 ounces a day in output for almost a month, before next week.

Platinum's consequent outperformance has cut its discount to gold to around $70 an ounce from around $230 in January.

Our medium-term outlook sees this trend continue, leading to the gold-platinum premium turning to discount in Q4 2012, averaging $50 an ounce over that quarter, RBS said in a note.