* Holdings of SPDR gold ETF <XAUEXT-NYS-TT> unchanged
* Higher oil reflecting potential inflationary pressures
* U.S. housing starts fall to record lows in April
(Adds comment, updates prices, adds U.S. housing data)
By Veronica Brown and Jan Harvey
LONDON, May 19 (Reuters) - Gold was firmer in Europe on
Tuesday as an unexpected fall in U.S. housing starts to record
lows in April sharpened risk aversion, but gains were limited as
the dollar trimmed losses against the euro.
Spot gold stood at $922.40 per ounce <XAU=> by 1306 GMT
compared with $917.20 quoted late in New York on Monday. U.S.
gold futures for June delivery <GCM9> on the COMEX division of
the New York Mercantile Exchange rose $1.40 to $923.10 an ounce.
New U.S. housing permits and starts unexpectedly slipped to
record lows last month, a government report showed, denting
expectations stability in the housing market was imminent.
Gold ticked up to a high of $924.90 in the immediate wake of
the data, but settled back to its previous levels as the market
digested the numbers and the dollar lifted a touch off its lows.
"The data that came out today is obviously quite poor," said
Standard Chartered analyst Daniel Smith. "But (the bad news) is
so built into prices that it has to be absolutely awful to have
any impact."
U.S. stock futures briefly turned negative after the data,
while European shares pared gains. [] []
Some investors have plugged into gold to hedge equally
against potential for the positive mood to sour and inflationary
problems posed by quantitative easing.
"Broadly what we've seen is an increase in non-commercial
long positions from tactical investors and broader currency
related movements," said Suki Cooper, analyst at Barclays
Capital.
She cited CFTC data for the week ending May 12, showing
non-commercial positions in U.S. Comex gold futures rising
primarily on the back of fresh long positions being established.
"There is also some positioning from a longer term
inflationary perspective," she added.
On Friday bullion hit a seven-week high of $933.65 per ounce
after data showed U.S. core inflation in April rose more than
expected.
SHORT-TERM WOBBLE?
But short-term, the market could see some seepage after
several failed attempts to capture and hold the $925 mark.
"Charts look strained at the moment and we may witness
accelerated selling once we scythe through the moving average
supports," said Pradeep Unni, senior analyst at Richcomm Global
Services.
Investors have been neither adding nor withdrawing money
from gold-backed funds in the past few days, with holdings at
the world's largest gold-backed ETF, SPDR Gold Trust <GLD>,
unchanged at 1,105.62 tonnes from May 18. []
Platinum <XPT=> rose to $1,132.50 from $1,128.50, boosted by
news U.S. President Barack Obama would propose the most
aggressive increase in U.S. auto fuel efficiency ever -- a move
that could lift prospects for the metal's usage to clean auto
emissions.
The policy initiative would directly regulate emissions for
the first time and resolve a dispute with California over
cleaner cars. [].
On the investment front, ETF Securities' platinum-backed
exchange-traded commodity saw inflows of 3,246 ounces on Monday,
recovering slightly after hefty outflows of nearly 43,000 ounces
last week.
London is playing host to the annual Platinum Week
gathering. For a TAKE-A-LOOK, see [].
The company's silver-backed product, meanwhile, rose again,
up 0.7 percent to a fresh record level of 19.262 million ounces.
The product's holdings have risen nearly 1.5 million ounces in
the last two weeks.
Spot silver <XAG=> was quoted at $13.93 an ounce <XAG=> from
$13.72 late on Monday, while palladium was at $230 compared with
$226.50 <XPD=>.
(Editing by James Jukwey)
