* Euro hits 4-year low on euro zone debt concerns
* Investors doubt EU countries can tighten their belt
* SPDR Gold Trust holdings hit another record
(Updates prices, adds details on platinum/palladium)
By Maytaal Angel
LONDON, May 17 (Reuters) - Gold steadied on Monday but
remained in sight of record highs as concerns over Europe's debt
crisis and whether it will cripple growth dominated markets,
boosting the metal's safe haven appeal.
Spot gold <XAU=> traded at $1,231.80 at 1018 GMT versus
$1,230.05 late in New York on Friday, when it set a record of
$1,248.95 before slipping.
On Sunday, German Chancellor Angela Merkel said a $1
trillion EU rescue plan had only bought the euro zone time to
tackle its fundamental problem -- a yawning gap between its
strongest and weakest economies. []
"There's still very good support for gold. The current bail
out is just a sweetener. We'll need to wait and see whether they
put in place actual measures to prevent eventual default,"
Standard Bank analyst Walter de Wet said.
"In the case of Lehman's it was banks which failed, so
governments could bail them out, but now the governments look as
if they might fail, so who is going to bail them out?".
Investors doubt fiscally weaker euro zone nations can
tighten their belts, or do so without stunting growth, and there
are signs anxiety over Europe is squeezing credit markets.
U.S. gold futures <GCc1> added $5.90 to $1,233.30 an ounce.
Gold priced in euro <XAUEUR=R> and sterling <XAUGBP=R> struck
record as well as gold futures in Shanghai <0#SHAU:>.
The euro meanwhile slid to a four-year low versus the dollar
on Monday as sovereign debt worries fuelled concerns the single
currency may drop further. []
Gold usually trades in step with the euro and counter to the
U.S dollar as it is seen as an alternative asset to the U.S.
currency. However, the metal is currently being bought as a safe
haven asset and hedge against currency volatility.
"While we expect volatility to remain high with respect to a
strengthening U.S. dollar against the Euro, safe-haven buying
will likely remain the predominant factor in price movements in
the coming weeks," Morgan Stanley said in a note.
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http://graphics.thomsonreuters.com/gfx/CT_20101705094907.jpg
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Holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>, rose to a lifetime high of
1,214.065 tonnes as investors sought a safe haven from volatile
currencies and declines in stock markets and oil.
Asian stocks fell sharply on Monday on euro zone debt
worries, but European stocks edged into positive territory,
limiting potential gains in gold.
"If U.S. equities manage to perform better today we could se
gold coming off a bit," said de Wet.
In other precious metals, silver <XAG=> was down at $19.12
an ounce versus $19.25, platinum <XPT=> fell to $1,690 versus
$1,715.50 while palladium <XPD=> dropped to $511 versus $523.50.
Weighing on the latter two metals used to make
auto-catalysts was news that new European car sales fell for the
first time in 10 months in April. []
Longer term, however, prospects for the metals remain
bright. According to a Reuters poll, average platinum and
palladium price forecasts have climbed since January on quickly
rising spot prices and hopes for an uptick in investment and
industrial demand. []
On Friday, Johnson Matthey said in an annual report rising
investment may take platinum to $2,000 an ounce in the next six
months, while palladium could reach levels not seen since 2001.
[]
(Reporting by Maytaal Angel. Editing by Anthony Barker)
