* Firmer stocks point to better appetite for risk
* SPDR gold ETF holdings rise around 12 T to record
* Medium-term outlook positive for gold as rates seen low
(Updates prices)
By Jan Harvey
LONDON, June 9 (Reuters) - Gold steadied in Europe on
Wednesday, consolidating after the last session's record high,
as a firmer tone to stocks reflecting better appetite for assets
seen as higher risk took the wind out of bullion's sails.
Spot gold <XAU=> was bid at $1,235.45 an ounce at 1048 GMT,
against $1,233.63 late in New York on Tuesday. U.S. gold futures
for August delivery <GCQ0> eased $7.90 an ounce to $1,237.70.
Prices touched a record $1,251.20 an ounce on Tuesday as
comments from Fitch on the "formidable" challenge faced by
Britain in cutting its budget deficit fuelled fears over the
outlook for European growth.
Despite an early rebound, risk appetite remains fragile amid
widespread sovereign risk concerns in the euro zone, firmly
underpinning gold, analysts said.
"As nervous as investors currently are, panicking very
easily, it is not to be ruled out that we will move higher again
in gold," said Peter Fertig, a consultant at Quantitative
Commodity Research.
The gold market remained underpinned by strong investment
interest, with holdings of the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Trust <GLD>, rising
to record highs at 1,298.53 tonnes on Tuesday. []
The 12-tonne rise in the trust's holdings reflects an inflow
of some $481 million at today's prices. The financial markets
remain sensitive to bad news, boosting bullion's appeal as a
safe store of value.
European shares rose after three sessions of falls as
sources quoted a Chinese government official as saying the
country's May exports grew about 50 percent, though gains were
tempered by lingering worries the euro zone debt crisis could
erode economic growth. []
The euro gained some stability on options demand, recovering
from its recent four-year low versus the dollar, but analysts
expected only a brief respite as strains in euro zone bond
markets hurt sentiment. []
RATES SEEN STAYING LOW
The medium-term environment for gold looks set to stay
positive, with interest rates -- which represent the opportunity
cost of holding non-interest bearing bullion -- expected to
remain low. A hike in U.S. rates is not widely seen before 2011.
"Although gold is trading at nominal highs, we are staying
long, as real rates are unlikely to move higher anytime
soon, and macro concerns are likely to linger," said Morgan
Stanley in a note.
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For an interactive timeline showing gold's rise to record
highs, click on:
http://graphics.thomsonreuters.com/10/GLD_TMLN.html
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From a chart perspective, gold faces some short-term
resistance at $1,250 an ounce, and could correct to support in
the $1,228-1,219 area, according to technical analysts at
Barclays Capital.
Among other precious metals, silver <XAG=> held firm in line
with gold at $18.25 an ounce against $18.19. Platinum <XPT=> was
flat at $1,530.50 an ounce, while palladium <XPD=> was at
$447.50 against $439.50.
As primarily industrial metals, chiefly used by the car
industry in catalytic converters, platinum group metals have
failed to keep pace with gains in gold this month as concerns
over the economic outlook weigh on buying interest.
Platinum has dipped 2 percent and palladium 5 percent since
the start of June, compared to a 1.4 percent rise in gold.
"The PGMs are likely to underperform as long as investors
don't realise that economic growth is improving in some areas,
and that budget cuts are not necessarily going to derail demand
from the automotive industry," said Peter Fertig, a consultant
at Quantitative Commodity Research.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
