* ECB cuts rates by 50 bps
* SPDR Gold Trust holdings rise to record
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 15 (Reuters) - Gold steadied on Thursday near
the previous session's close as interest in the precious metal
as a haven from risk supported prices after fluctuating in the
wake of a rate cut by the European Central Bank.
Spot gold <XAU=> rose to a session high of $820.60 an ounce
immediately after interest rate cuts, before slipping to a low
of $807. It was quoted at $811.50/813.50 an ounce at 1524 GMT
from $810.55 in New York late on Wednesday.
Gold, often seen as a secure store of value in times of
turmoil, is benefitting from the fear triggered by a spate of
poor economic data and bad news from banks that has raised the
prospect of a prolonged recession.
"Investors are buying into gold as a hedge against inflation
and turmoil in the financial markets," Deutsche Bank trader
Michael Blumenroth said. "(They think) maybe the worst is not
over."
The ECB cut rates for the fourth month in a row by 50 basis
points. The decision initially pressured the euro but the single
currency quickly bounced back as traders expect the cut to leave
the door open for further cuts. []
However, lower oil prices are putting some pressure on gold.
Bullion typically moves in line with crude, as it is often
bought as an inflation hedge, and the direction of the oil
market is an indicator of interest in commodities.
Oil fell more than 4 percent or nearly $2 a barrel after
bleak figures from world markets pointed to weak demand.
[]
But investor interest in gold remains strong. Bullion
holdings of the SPDR Gold Trust in New York, the world's largest
gold-backed exchange-traded fund, rose to a record for the
second time this year. []
Demand for gold in India, the world's largest bullion
market, was also picking up as prices fall, dealers said.
On the supply side, South African gold output fell 8.7
percent in volume terms in Nov 2008 from a year before. The
country's gold output has fallen since the electricity grid
suffered a near collapse last January. []
HIGH EYED
Metals consultancy GFMS said in the second update of its
2008 Gold Survey on Thursday that gold could revisit its record
high above $1,000 an ounce by the end of June as government
fiscal stimulus efforts undermine the greenback. []
GFMS said it sees gold averaging $915 an ounce in the first
half of 2009, up from an average $871.96 last year.
Among other precious metals, spot silver <XAG=> was quoted
at $10.40/10.48 an ounce against $10.54 in New York late on
Wednesday.
Platinum and palladium prices also fell. The platinum group
metals, which are mainly used in car manufacturing, have fallen
dramatically from their highs of early 2008 as the auto sector
has come under pressure.
"There is a danger in platinum if the sales misery continues
in the car industry that we might go even lower, even though the
production side is going down as well," said Wolfgang
Wrzesniok-Rossbach, head of sales at precious metals trading
house Heraeus.
Spot platinum <XPT=> slipped to $920/930 an ounce from $933
late in New York on Wednesday, while palladium <XPD=> fell to
$176.50/181.50 an ounce from $180.50.
(Editing by Sue Thomas)
