* Euro, stocks rise to session highs after ECB comments
* Bank leaves interest rates unchanged at 1.0 pct
* Trichet indicates no change to monetary policy
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 10 (Reuters) - Gold fell more than 1 percent on
Thursday as the euro's climb to session highs after a European
Central Bank policy statement and further gains in stock markets
indicated rising appetite for assets seen as higher risk.
The euro <EUR=> extended gains after European Central Bank
President Jean-Claude Trichet's non-committal remarks on further
bond purchases were seen to indicate a retreat from quantitative
easing. The bank held interest rates at 1.0 percent.
Spot gold <XAU=> hit a low of $1,214.65 and was bid at
$1,218.45 an ounce at 1418 GMT, against $1,230.35 late in New
York on Wednesday. U.S. gold futures for August delivery <GCQ0>
fell $9.60 to $1,220.30.
Trichet also said after the ECB decision that he expects the
euro zone's economy to recover at a moderate pace, with
quarterly growth rates uneven. []
His comments further lifted stock markets, which had started
to rise on Wednesday after Federal Reserve Chairman Ben Bernanke
said the economic recovery was on a solid footing. []
"With growth potential back on track both in the euro zone
and the U.S., risk could get offloaded from bullion, and that is
potential a weakness signal," said Pradeep Unni, senior analyst
at Richcomm Global Services.
The euro rose back above $1.21 against the dollar, with
strong demand for Spanish bonds easing concern about the
country's ability to finance its debt and a spike in Chinese
exports boosting confidence on global growth. []
Heavy losses in the euro on the back of European sovereign
debt concerns have lifted demand for gold this year as investors
sought to diversify out of the currency, analysts said. The
euro's bounce higher has curbed this buying.
"If you look at a chart of the euro, it's been punished
quite severely for some time now, and it is not unreasonable to
believe that it will have a bit of a bounce along the way," said
Simon Weeks, head of precious metals at the Bank of Nova Scotia.
"We are seeing an interim consolidation, with the euro
recovering and gold down. Overall I would expect the euro to
turn lower again and gold to turn higher, but it is not going to
be a one-way street."
Oil prices also rose 2.3 percent on a combination of
supportive export data from China, a drop in U.S. jobless claims
and the dollar's weakness against the euro. []
COIN, BAR DEMAND SOFTENS
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, at a record high
1,298.53 tonnes on Wednesday. []
However, demand for small investment products like coins and
bars has tailed off recently in Europe and the United States,
UBS analyst Edel Tully said in a note.
"Physical demand, relatively dampened since Wednesday of
last week, is now overshadowed by increased scrap supply out of
Asia," she said. "This price-dependent supply... suggests more
downside risk for the yellow metal in the short term."
Also on the supply side of the market, Statistics South
Africa said the republic's gold output fell 6.2 percent in April
from the same month of 2009. []
Among other precious metals, silver <XAG=> was at $18.23 an
ounce versus $18.07, palladium <XPD=> at $447.78 versus $447.50,
and platinum <XPT=> at $1,539.30 an ounce against $1,525.
The ratio of gold to platinum -- which shows how many ounces
of gold are necessary to buy an ounce of platinum -- lifted from
the six-month low of 1.22 it hit at the beginning of the week,
but platinum remains relatively inexpensive compared to gold.
(Editing by Alison Birrane)
