* Euro surrenders gains, Wall St stocks down
* SPDR ETF at record; PIMCO cuts gold exposure on valuation
(Updates throughout with comment, prices)
By Amanda Cooper
LONDON, June 16 (Reuters) - Gold held steady on Wednesday as some investors took the metal's earlier rise above $1,235 an ounce to take profit, while concern about the unfolding debt crisis in Europe and the global economic outlook provided support.
A drop in U.S. homebuilding to a five-month low, a stark warning from FedEx <FDX.N> -- often viewed as a gauge of the health of the wider economy -- and heightened concern over the fiscal problems in euro zone member Spain reinforced the backdrop for gold.
Spot gold <XAU=> was bid at $1,232.65 an ounce at 1415 GMT, against $1,232.45 late in New York on Tuesday. U.S. gold futures for August delivery <GCQ0> were down 50 cents at $1,233.90.
"The main focus really is on one hand the liquidity, so what's tending to happen is people are tending to buy gold and other assets at the same time," said Standard Chartered analyst Daniel Smith.
"We are going to push higher in the weeks ahead. The pullback we saw from the previous highs is quite limited and investors are still waiting to come into this market."
Gold hit a record high of $1,251.20 last week and is now just over 1 percent away from this level, as the euro zone debt crisis has raised the risk of a slowdown in global economic growth and triggered a broad investor push into perceived safe-haven assets such as bullion or government bonds.
"The whole sovereign debt situation lingers on," said Ole Hansen, senior manager at Saxo Bank in Copenhagen. "There will be persistent fear that some government debt in Europe will have to be readjusted, and that will lend support (to gold)."
He added: "It is relatively easy to drive gold higher as we are getting into the summer period, when anything can happen because it is characterised by high volatility and low activity."
Fresh concern about Spain's banking and credit system knocked the euro off two-week highs against the dollar, and forced the premium investors' demand for holding Spanish debt over German bunds to a euro life high. [
][ ]A weaker euro, and consequently stronger dollar, has historically been bad for gold, but this correlation has broken down as investors have sought safety in the U.S. currency.
U.S. stocks fell at the start of trade after a decline in U.S. housing starts to a five-month low and as concern over Spain's fiscal situation rattled investors.
SPDR ETF HOLDINGS AT RECORD
Interest in physical gold kept holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust <GLD>, at a record 1,306.137 tonnes on Tuesday.
Some large investors have expressed concern that gold may be overvalued at current levels after reaching a record $1,251.20 last week.
The chief executive of PIMCO, the world's biggest bond fund, said on Wednesday it had cut exposure to gold on valuation. "At some point valuations became expensive and we halved our exposure to gold," Mohamed El-Erian told Reuters TV. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For Reuters Insider interview, click on:
http://link.reuters.com/pus22m ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Last week, commodities investor Robert Prechter said gold could fall by as much as 40 percent from its recent highs. [
]High prices are weighing on demand for gold in some traditionally key bullion markets, such as India and the Middle East, and encouraging more selling of scrap gold.
Istanbul Gold Exchange Chairman Osman Sarac told Reuters on Wednesday that Turkey's 2010 gold imports will not exceed 2 tonnes, versus an earlier forecast of 40 tonnes. [
]Silver <XAG=> edged up to $18.51 an ounce against $18.49.
The gold-silver ratio -- how many ounces of silver are needed to buy an ounce of gold -- fell to its lowest this month on Wednesday, meaning the metal is becoming increasingly expensive compared with gold.
Platinum <XPT=> was at $1,568.50 an ounce against $1,572.50, while palladium <XPD=> was at $469.00 against $469.50. (Editing by Sue Thomas)