* S&P warns French debt rollover plan may prompt Greek default
* Euro expected to take support from ECB rates decision
* SPDR gold ETF reports 78,000/oz outflow (Recasts lead, updates prices paras 1-4)
By Jan Harvey
LONDON, July 4 (Reuters) - Gold rose more than half a percent in very thin volume on Monday after its drop to a six-week low attracted buyers, and as a credit agency warning stoked new jitters over the Greek rescue plan.
Spot gold
U.S. gold futures for August delivery rose $13.90 an ounce or nearly 1 percent to $1,496.50, with trading volume at only around 12 percent of the 30-day average due to the U.S. Independence Day holiday.
Gold fell more than 5 percent or nearly $80 an ounce from a near-record $1,557 less than two weeks ago, but has attracted some bargain hunters at lower levels.
"Sentiment on gold is still far from ideal," said Andrey Kryuchenkov, an analyst at VTB Capital. "This is buying on the lows (after) Friday's retreat."
Comments from Standard & Poor's that Greece would likely be in default if it follows a debt rollover plan pushed by French banks also stoked lingering concerns over the stability of the euro zone. [ID:nL3E7I40H3]
The euro retreated from one-month highs against the dollar after the report from S&P, while the cost of insuring Greek government debt against default rose. [FRX/] [GVD/EUR]
"The debt crisis in Greece has eased somewhat for the time being, but that does not mean it is solved," said Commerzbank analyst Daniel Briesemann. "The problem is still there -- the EU and Greece have only gained some time."
The euro is expected to draw support, however, from market expectations that the European Central Bank will raise key lending rates at a policy meeting later this week.
A weaker dollar would tend to benefit gold by making dollar-priced commodities cheaper for other currency holders as well as boosting the metal's appeal as an alternative asset.
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Gold 24-hour technical outlook:
http://graphics.thomsonreuters.com/WT1/20110407094514.jpg
Gold faces rocky ride after end of QE2 [ID:nN1E76019V]
Graphics: CFTC reports on gold, silver positions:
http://r.reuters.com/buv87r
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DEMAND CURBED
Gold has seen some physical buying return, especially in the major Asian markets, after its dip below $1,500 an ounce, but this has been muted by seasonal factors. Summer is typically a quiet time for gold buying. [GOL/AS]
"The seasonality of physical demand suggests that gold won't be able to rely on the same depth of physical interest in July as it could in January," said UBS in a note.
"We do expect physical buyers to react to lower prices but don't expect strong interest until prices get below $1,480 - as they did briefly on Friday, when our physical sales to India picked up to above-average levels."
India is the world's biggest consumer of gold.
Data from U.S. futures regulator the Commodity Futures Trading Commission showed on Friday that managed money had sharply cut bullish bets in COMEX gold futures and options as bullion prices tumbled. [ID:nN1E7601K9]
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust
ETFs, which issue securities backed by physical stocks of a precious metal, have accounted for a significant proportion of gold investment in recent years.
Silver