* Recovering equity and commodity markets dent safe haven
* Bernanke comments on gold trigger weakness
* SPDR gold ETF holdings rise around 12 T to record
* Coming up: U.S. May retail sales due on Friday
(Recasts, updates prices to market close, changes byline,
dateline, previous LONDON)
By Frank Tang
NEW YORK, June 9 (Reuters) - Gold retreated on Wednesday as
weaker safe-haven demand and comments by Federal Reserve
Chairman Ben Bernanke weighed down on the metal after it hit a
record high in the previous session.
Gains in the euro, equity and commodity markets showed
appetite for assets perceived as higher risk returned on
Wednesday, denting gold's investment appeal.
Comments by Bernanke about gold sending a different signal
in response to inflation when compared with other assets
prompted bullion investors to lighten positions, traders said.
At a U.S. House of Representatives hearing, Bernanke said
that prices of commodities including oil and food have fallen
quite severely recently.
So, "gold is out there doing something different from the
rest of the commodity group," he said. However, he said there
is a great deal of uncertainty in financial markets.
[]
Spot gold <XAU=> was at $1,227.15 an ounce at 2:29 p.m. EDT
(1829 GMT), against $1,233.63 late in New York on Tuesday. U.S.
gold futures for August delivery <GCQ0> settled down $15.70, or
1.3 percent, at $1,229.90 an ounce.
George Gero, vice president of RBC Capital Markets Global
Futures in New York, said investors were adjusting their
allocation to bullion after rallies to all-time highs.
Gero also said the Bernanke comments weighed on the metal.
"Central bankers view gold as an unnecessary distraction
from government bonds. So, when they speak, they show their
un-enthusiasm because gold is the economic and political
barometer," he said.
Prices touched a record $1,251.20 an ounce on Tuesday as
comments from Fitch that Britain faced what it called a
formidable challenge in cutting its budget deficit fueled fears
over the outlook for European growth.
"Risk appetite has returned a bit after people parked their
money in gold to try and shelter from the storm," said Daniel
Major, an analyst at RBS Global Banking and Markets.
"As extreme risk aversion tails off, gold is going to
suffer ... If we get some degree of normality returning to the
markets, gold safe-haven buying is likely to drift off."
U.S. stocks rose as the Dow Jones industrial average
recouped the 10,000 level as better-than-expected Chinese
export data for May boosted hopes for economic recovery, while
crude oil also rose more than $2 to above $74 a barrel. []
[].
The euro rose against the dollar for a second straight
session on Wednesday, boosted by options-related demand and
renewed market hopes that Europe's debt crisis may not put the
brakes on global growth. []
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.
TECHNICALS BULLISH
Analysts said technical indicators showed that gold's new
target is higher than $1,256 as the uptrend has not been
violated and a rising channel is intact. Gold is likely to
climb within the channel until it reaches $1,260.
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Graphic:http://link.reuters.com/syg29k
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Among other precious metals, silver <XAG=> was at $18.13 an
ounce against $18.19.
Platinum <XPT=> was at $1,530 from $1,530.50 an ounce,
while palladium <XPD=> was at $448.50 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.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCQ0> 1229.90 -15.7 -1.3 1096.20 12.2
US silver <SIN0> 18.189 -0.288 -1.6 16.845 8.0
US platinum <PLN0> 1534.00 5.20 0.3 1471.00 4.3
US palladium <PAU0> 455.25 13.10 3.0 408.85 11.3
Prices at 2:45 p.m. EDT (1845 GMT)
Gold <XAU=> 1235.25 -5.68 -0.5 1096.35 12.7
Silver <XAG=> 18.27 -0.05 -0.3 16.84 8.5
Platinum <XPT=> 1517.50 2.00 0.1 1465.50 3.5
Palladium <XPD=> 438.00 9.000 2.0 405.50 8.0
Gold Fix <XAUFIX=> 1233.50 -1.50 -0.1 1104 11.7
Silver Fix <XAGFIX=> 18.27 -7.00 -0.4 16.99 7.5
Platinum Fix <XAGFIX=> 1537.00 7.00 0.5 1466 4.8
Palladium Fix<XAGFIX=> 453.00 8.00 1.8 402 12.7
(Additional reporting by Jan Harvey and Michael Taylor in
London; Editing by Sofina Mirza-Reid)
