* Firmer stocks, commodities point to better risk appetite
* SPDR gold ETF holdings rise around 12 T to record
* Medium-term outlook positive for gold as rates seen low
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 9 (Reuters) - Gold steadied on Wednesday,
consolidating after the last session's record high, as a firmer
tone to stocks and commodities reflecting better appetite for
assets seen as higher risk took the wind out of its sails.
Spot gold <XAU=> was bid at $1,233.50 an ounce at 1337 GMT,
against $1,233.63 late in New York on Tuesday. U.S. gold futures
for August delivery <GCQ0> eased $10.50 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 Wednesday's sharper appetite for risk, such fears
remain a major factor underpinning gold prices.
"When you look at what has been happening in Europe, gold
has been moving with this greater fear in the market, fear of a
greater financial crisis," said Nicholas Koutsoftas, portfolio
manager for commodities and energy at GE Asset Management.
"Gold doesn't act like other commodities, so how far (it
will rise) is hard to say," he said. "If you're managing a
portfolio, the less risky thing to do would be to have more of a
market weight in gold to protect against these moves to the
upside that can't be determined."
The gold market remained supported 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.
European shares were higher on Wednesday after three
sessions of falls, as better-than-expected Chinese export data
for May boosted hopes for economic recovery. U.S. stock futures
also pointed to a higher opening on Wall Street. []
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. []
Among other commodities, oil rose nearly 3 percent as
reports of stronger Chinese exports boosted expectations for raw
materials demand. Industrial metals like copper, lead and zinc
also climbed. [] []
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 any time
soon, and macro concerns are likely to linger," said Morgan
Stanley in a note.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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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Among other precious metals, silver <XAG=> held firm in line
with gold at $18.27 an ounce against $18.19.
"Silver remains very undervalued versus gold," said bullion
trader Goldcore in a note. "The ratio will likely continue to
fall and the much smaller silver market should continue to
outperform gold."
Platinum <XPT=> firmed to $1,534.85 from $1,530.50 an ounce,
while palladium <XPD=> was at $450.58 against $439.50.
Platinum group metals have failed to keep pace with gains in
gold this month as concerns over the economic outlook weigh on
buying interest for the autocatalyst metals.
"The PGMs are likely to underperform as long as investors
don't realise that economic growth is improving in some areas,"
said Quantitative Commodity Research consultant Peter Fertig.
(Reporting by Jan Harvey; Editing by Alison Birrane)
