* Gold rises for second day, ETF flows stabilise
* China, Egypt in focus, euro recovers
* Coming Up: U.S. ICSC chain stores yy weekly; 1245 GMT
(Updates prices)
By Amanda Cooper
LONDON, Feb 8 (Reuters) - Gold inched higher on Tuesday as
equities fell, the euro picked up and flows of metal out of
exchange-traded funds stabilised, although a rise in Chinese
benchmark rates limited gains.
The gold price came under intense pressure last week after
more signs emerged that global growth continues to improve and
that the euro zone debt crisis has not worsened, which eroded
some investor appetite for the metal.
Spot gold <XAU=> was up 0.1 percent at $1,351.95 an ounce by
1207 GMT, set for a second consecutive weekly rise but still 5
percent below record highs struck in mid-December.
U.S. April gold futures <GCJ1> were up 0.3 percent at
$1,352.50 an ounce.
China's central bank raised interest rates by a quarter
point to 6.06 percent, its second increase in just over a month
as it steps up its fight against stubbornly high inflation.
[]
"Chinese investment or jewellery buying has been pretty
strong over the last quarter, and I wouldn't have thought that
it is going to slow down particularly," said Societe Generale
analyst David Wilson.
"Gold is getting some support from nervousness about
northern Africa and the Middle East, and obviously still
bubbling in the background are concerns about Europe," he said.
EGYPT UNREST CONTINUES
Political turmoil in Egypt, where protesters called for a
fresh push to eject President Hosni Mubarak from power, has
unsettled the investment community and pushed the oil price
above $100 a barrel. [] []
"While the euro debt crisis is not in people's minds, the
situation in the Middle East has become more important, so that
will prevent investors from making any big sales," said LBBW
commodities strategist Thorsten Proettel.
"The SPDR holdings have been nearly unchanged, and
profit-taking from investors has perhaps stopped for the
moment," he said.
Since protesters took to the streets of Cairo and other
major Egyptian cities in late January, the gold price has risen
by over 3 percent, although much of the potential for safe-haven
buying has been undermined by a rally in riskier assets, with
the S&P 500 <.SPX> up 2 percent and the copper price <CMCU3> up
over 6 percent in the same period of time.
Holdings of metal in the SPDR Gold Trust <GLD> have risen by
1 tonne in the past week to 1,228.864 tonnes.
In January the fund registered its largestly monthly outflow
of metal since April 2008 as investors favoured equities and
industrial commodities over perceived safe-havens such as gold.
The euro backed off session highs aginst the dollar after a
reading of German industrial output fell shy of expectations,
while the Australian dollar <AUD=D4> slipped after the rise in
Chinese interest rates reinforced fears that growth in the
world's second-largest economy may slow. []
European shares <> fell by half a percent, backing off
the previous day's 29-month closing highs. []
Concerns over higher inflation in emerging markets,
indications of an economic recovery gathering pace in the United
States, modest valuations and tentative signs of stability in
the euro zone sovereign debt crisis have fuelled the
outperformance of shares in developed markets.
Platinum and palladium rallied, although gains were tempered
by China's interest rate decision.
Both metals have seen inflows into some of the major
exchange-traded funds in the past week, such as ETF Securities'
U.S.-listed products, indicating investor appetite.
Spot platinum <XPT=> was last up 0.2 percent at $1,841.24 an
ounce, nearing its highest level since July 2008, while
palladium <XPD=> remained within sight of fresh ten-year highs
and was last up 0.4 percent at $818.50 an ounce.
Silver <XAG=> held in positive territory, up 0.1 percent at
$29.40. The price is up about 5 percent this month so far and is
within 5 percent of 31-year highs seen in early January.
The Austrian Mint said on Tuesday it will not make five- and
10-euro silver coins for circulation this year because of the
high price, although it will continue making popular collector
items such as its Philarmonic coins.
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Jane Baird)
