* Euro slides as Moody's puts Spain rating on review
* Main silver ETF holdings hit record at 10,964.14 T
* U.S. platinum, palladium ETP holdings at record
(Updates throughout, previous SINGAPORE)
By Jan Harvey
LONDON, Dec 15 (Reuters) - Gold eased below $1,390 an ounce
in Europe on Wednesday as the dollar rose broadly, with the euro
coming under selling pressure as ratings agency Moody's put
Spain's AA1 rating on review for a possible downgrade.
Underlying demand for the metal as a haven from risk was,
however, preventing a larger correction, analysts said.
Spot gold <XAU=> was bid at $1,387.40 an ounce at 1011 GMT,
against $1,395.61 late in New York on Tuesday. U.S. gold futures
for December delivery <GCZ0> fell $15.20 an ounce to $1,388.40.
"Clearly the downside is well supported by ongoing
uncertainties about debt, with Moody's (reviewing) some European
ratings outlooks, on Spain and Belgium and so on," said Credit
Agricole analyst Robin Bhar.
"In the short term that will be seen as a negative because
it does harm the euro, but in the long term it has got to be a
supportive factor, particularly if those concerns about fiscal
deficits focus on the United States."
Moody's said on Wednesday it had put Spain on review for a
possible downgrade because of its high funding needs and doubts
about its banking sector and regional finances. It cut its
outlook for Belgian debt to negative on Tuesday. []
This pressured the euro down 0.7 percent against the dollar
<EUR=>, 0.2 percent versus the Japanese yen <EURJPY=> and to
three-month lows against the Swiss franc <EURCHF=>.
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For a graphic showing the credit ratings of certain euro
zone economies, click on: http://r.reuters.com/get52k
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The Moody's news fuelled concern over the scale of some euro
zone countries' debt, after Greece and Ireland struggled with
their finances earlier this year. This helped drive gold to a
record $1,430.95 an ounce earlier this month.
U.S. DEFICIT EYED
Some budget experts also fear the United States will face a
Greece-style debt crisis over the coming decade if it does not
bring down budget deficits, which hit 9.9 percent of GDP in
fiscal 2009.
"The unease generated by ever-growing budget deficits is
negative for the U.S. dollar and supportive of gold," said HSBC
in a note. "A lack of confidence in the government's willingness
to cut the deficit is an important component in the gold rally."
Gold buying in main consumer India slowed on Wednesday as
the weak rupee kept prices of the precious metal relatively high
in local terms. []
Meanwhile the world's largest gold exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings fell by just over 3
tonnes on Tuesday. []
However, the iShares Silver Trust <SLV>, the world's largest
silver-backed ETF, said its holdings hit a record high at
10,964.14 tonnes on Dec 14. []
"Given our positive outlook for gold we expect silver to
enjoy continued investor demand in 2011," said UBS in a note.
"But silver is very volatile, and this will deter some
investors. We see silver averaging $33.00 in 2011."
Spot silver <XAG=> was bid at $29.09 an ounce against
$29.40, platinum <XPT=> was at $1,691.24 an ounce against
$1,704.24, and palladium <XPD=> at $750.47 against $757.97.
The amount of palladium held to back the New York-listed
ETFS Physical Palladium exchange-traded product rose 1.4 percent
to a record high of 1.119 million ounces on Tuesday, according
to the U.S. arm of ETF Securities, which manages the product.
Holdings of the ETFS Physical Platinum ETP also held at a
record 412,733 ounces.
(Editing by James Jukwey)
