UPDATE - Gold jumps in Europe on options expiry, euro Wednesday August 27, 9:27 am ET
(Adds fresh quotes, details, paras 2, 3-6) LONDON, Aug 27 (Reuters) - Gold shot up more than $5 in Europe on Wednesday, with traders citing euro-related fund buying and a move to push for a strike price of $370.00 an ounce at the over-the-counter options expiry later in the day.
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After trading in a tight 364.00-365.00 range on Wednesday morning ahead of the end-of month options expiry (expected at 1330 GMT), traders said that fund buying was sparked off by a stronger euro against the dollar. This helped some players to push for a strike price of $370.00 an ounce on the expiry.
"We've seen some fund buying with the euro going up but maybe someone has a lot of $365.00 and $370.00 calls that they want to make some money out of," one trader said.
At 1303 GMT, spot gold was quoted at $369.70/370.45 an ounce from $364.75/365.50 quoted late on Tuesday in New York.
"It's funds exerting some pressure on people running option shorts. Once the expiry's out of the way it should settle down. It's a bit of a bull trap," said Simon Weeks, bullion director with ScotiaMocatta.
Analysts have been upbeat over the medium-term outlook for the spot gold price, citing its ability to trade up in recent weeks against the backdrop of a stronger dollar and rising hopes of U.S. economic recovery.
But a massive number of speculators holding long positions was seen as a cause for concern.
