* Gold's latest bubble pops as dollar rises vs euro
* Euro zone debt concerns resurface; Ireland, Portugal eyed
* Silver tumbles in New York, seen as vulnerable after gains
(Updates prices, adds comment)
By Amanda Cooper and Jan Harvey
LONDON, Nov 10 (Reuters) - Gold prices surrendered gains to
turn lower on Wednesday and silver retreated from its earlier 5
percent climb, as the euro wilted versus the dollar amid fresh
concerns over euro zone sovereign debt levels.
The spot markets were also tracking heavy liquidation in New
York precious metals futures, where silver plunged more than 8
percent to session lows and gold fell more than $20 an ounce.
Spot gold <XAU=> was bid at $1,389.37 an ounce at 1604 GMT,
against $1,391.99 late in New York on Tuesday. Earlier it hit a
session high of $1,410.30. Silver <XAG=> was at $26.98 against
$26.88, down from an earlier peak of $28.15.
U.S. gold futures for December delivery <GCZ0> were down
$23.00 an ounce to $1,387.10, while silver futures <SIZ0> were
down 194.60 cents an ounce to 2,696.00 cents.
Gold has rallied sharply in recent sessions, hitting a
record high near $1,425 an ounce on Tuesday, but the metal's run
higher struggled to maintain traction as the dollar climbed.
"People were getting on with the momentum, and once that
trade ran out and people started noticing the U.S. dollar going
up, it led to a bit of a reality check," said Macquarie analyst
Hayden Atkins.
The euro lost ground against the dollar on Wednesday,
retreating further from the 9-1/2 month high it hit last week,
as concerns resurfaced over debt problems facing smaller euro
zone members Italy and Portugal. []
On the debt markets, German Bund futures <FGBLc1> turned
positive on Wednesday, reversing earlier losses as investors
dumped higher-yielding debt on nervousness over the state of the
euro zone's peripheral economies. []
In the longer run, fresh worries over sovereign debt may
boost interest in precious metals as a safe store of value, but
in the short term they are reacting chiefly to the stronger
dollar, which curbs their appeal as an alternative investment.
Silver in particular may struggle to hold its ground after
its stellar gains this year, analysts said.
"The rally in silver has been quite extraordinary.... and it
probably did go too far," said Macquarie's Atkins.
"People are reassessing whether there is any more upside in
a metal that is already at 30-yaer highs and has got there very,
very quickly. I would think that is more vulnerable of the two."
SILVER SLIDES
Silver was the top performer of the precious metals complex
in earlier trade with a 5 percent rise, following its most
volatile trading session since early 2009 on Tuesday.
The CME Group, which owns the COMEX exchange, said it would
raise the margin requirement for silver futures to $6,500 a
contract from $5,000 previously, implying a leverage ratio of
21.5, to curb some of the volatility that has developed.
"It is important to put yesterday's price action into
context: despite its violence, Tuesday's pullback only brought
precious metals prices back to Monday's levels and should
therefore be seen as a clearing-out of intraday froth," said UBS
precious metals strategist Edel Tully, in a note.
"Pullbacks aren't a bad thing - they test the conviction of
existing longs and the eagerness of those waiting on the
sidelines."
Holdings of metal in the iShares Silver Trust <SLV>, the
world's largest silver ETF, hit a new record high, indicating
strong investor demand. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Silver exchange-traded fund trading volumes reached 10 times
the average, graphic:
http://link.reuters.com/fef64q
Gold price performance: http://link.reuters.com/juz44q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
In the platinum group metals, palladium <XPD=> rose by 1.9
percent to $703.22, easing back from nine-year highs of $740.72
in the previous session. Platinum <XPT=> eased to 1,735.24 an
ounce, off Tuesday's two-year high of $1,806.5.
(Additional reporting by Rujun Shen in Singapore; Editing by
William Hardy)
