* ECB warns euro zone banks may see second wave of losses
* Euro slides to four-year low versus dollar
* Chinese, European manufacturing growth slows in May
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 1 (Reuters) - Gold rose above $1,225 an ounce
in Europe on Tuesday as investors bought the metal as a haven
from debt problems in the euro zone, after the European Central
Bank warned the region's banks may face a fresh wave of losses.
Spot gold <XAU=> was bid at $1,225.05 an ounce at 1328 GMT,
against $1,214.20 late in New York on Monday. U.S. gold futures
for June delivery <GCM0> on the COMEX division of the New York
Mercantile Exchange rose $12.30 to $1,224.50 an ounce.
The metal is taking support from concerns that sovereign
debt problems in euro zone countries like Greece, Spain and
Portugal may ultimately damage the wider economy.
"The macroeconomic problems in the global economy (are)
primarily to do with the massive debts of sovereign states,"
said Angelos Damaskos, chief executive of Sector Investment
Managers Ltd.
"The only realistic solution to finance that kind of debt is
to print a lot of money and deflate away from the debt. That
would be inflationary in the short term."
"The main currencies around the world -- the dollar, the
euro and the pound -- are being deplaced, and investors feeling
that are looking for alternative store of value," he said. "They
will look at traditional stores of value such as gold.
The ECB warned on Monday that euro zone banks face up to 195
billion euros ($236.9 billion) in a "second wave" of potential
loan losses over the next 18 months due to the financial crisis.
[]
The euro <EUR=> tumbled more than 1 percent in response to a
four-year low against the dollar. Gold typically moves in the
opposite direction to the U.S. currency, but both have benefited
from safe-haven buying this year. []
Standard Bank analyst Walter de Wet said manufacturing data
due later is also being closely watched for clues on the outlook
for the broader economy, and therefore for stocks. He said any
revival in equities currently tends to augur a dip in gold.
BEARISH
"We have seen China('s data) already coming in slightly
lower than expected, and if these things come out bearish I
think gold will find support," he said.
Data showed manufacturing growth in China slowed in May as
the pace of new orders eased amid growing uncertainty about the
impact of Europe's debt crisis on Asia's export-dependent
economies. []
A later report showed euro zone manufacturing growth also
slowed in May from the previous month. []
U.S. manufacturing data from its Institute of Supply
Managers is due at 1400 GMT.
Investment demand for gold held steady, with holdings of the
world's largest gold exchange-traded fund, New York's SPDR Gold
Trust <GLD>, still at a record 1,267.93 on Monday. []
Sean Corrigan, chief investment strategist at Diapason
Commodities Management, said he saw gold and to a lesser extent
silver as "insurance policies" against risk in the wider market.
Reuters' technical analysis suggests gold is likely to find
resistance near $1,229 an ounce. If it breaks this, it could
re-challenge its May 14 record of $1,248.95 an ounce. []
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For a graphic showing gold's technical outlook, click:
http://graphics.thomsonreuters.com/gfx/WT_20100106090217.jpg
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Prices of other commodities slipped, however, as buyers
worried that soft manufacturing data from China and Europe
suggest demand for raw materials may decline. [] []
Silver <XAG=> was bid at $18.54 an ounce against $18.49.
Platinum <XPT=> was at $1,548 an ounce against $1,558.50, while
palladium <XPD=> was at $453.93 against $465.10.
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For a graphic showing price performances for commodities in
2010: http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
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(Editing by Sue Thomas)
