* Spot gold rises to $893.80 per troy ounce <XAU=>
* Rhodium lengthens gain, tops $1,600/oz <RHOD-LON>
* Bullion bolstered as bank jitters push global stocks down
* Currency fundamentals supportive as dollar eases
(Writes through, adds quotes, updates prices)
By Jan Harvey and Veronica Brown
LONDON, April 21 (Reuters) - Gold rose one percent on
Tuesday as renewed credit and banking jitters kept global shares
under pressure and heightened the metal's allure for risk-wary
investors.
By contrast, investors pondering whether the economic
downturn might be showing some sign of stabilising capitalised
on end-user demand for auto-material rhodium, extending recent
sharp gains.
Global stocks, as measured by MSCI's all-country index, were
down 0.8 percent <.MIWD00000PUS> and U.S. stock market futures
pointed to a lower Wall Street open after disclosure of a rise
in Bank of America's <BAC.N> bad debts on Monday []
rekindled fears over the stability of financial stocks.
Rising caution ushered spot gold <XAU=> to $893.80 an ounce
at 1230 GMT, compared with $884.15 quoted late in New York on
Monday, marking a second day of gains.
"The inverse correlation between gold and equities does tend
to evolve and reappear when the declines in equities are
markedly sufficient," said Ashraf Laidi, a strategist at CMC
markets in London.
"It's unlikely that we'll see another 4 percent decline in
the Dow today. But gold is likely to retain its gains and
bullishness," he added.
Physical fundamentals also looked promising. Gold demand in
India, the world's largest bullion buyer, rose from lows after
prices had fallen last week, with trader MMTC Ltd saying it
would import 9-10 tonnes this month. []
The dollar weakened a touch versus the euro after the
previous session's gains. Gold is often bought as an alternative
asset to the U.S. currency and typically moves in the opposite
direction to it. []
"It was interesting to us that both gold and the U.S. dollar
moved directionally together (on Monday), a sign of increased
investor risk-aversion," HSBC said in a note.
"If equity markets continue to retrace, gold prices are
likely to trade higher."
RHODIUM EXTENDS GAIN
Autocatalyst material rhodium <RHOD-LON> rose another $50 on
Tuesday to $1,625 an ounce, extending stellar gains seen over
the past week.
Prices have climbed nearly 40 percent since last Tuesday --
albeit from lower levels -- with analysts citing end-user demand
in what may be a tentative signal of moderation in the economic
crisis.
Analysts say expectations for rises in Chinese car sales and
auto industry initiatives -- including Germany's scrapping
scheme to encourage new car purchases -- have enticed end-users
to replenish stocks of the metals and investors to jump on the
bandwagon.
"There's a lot of demand out of China. I think its car
related and chemical related. In these small markets which are
unregulated there's also a little bit of investment demand and
that's triggering the price even further," said Andreas Daniel,
head trader at German-based Heraeus Metals.
Ruthenium <RUTH-LON>, used to make computer hard discs, also
rose nearly 7 percent on Tuesday to $80 an ounce.
Despite a slightly brighter gold price outlook, concerns
over investment demand are lingering after key gold-backed
exchange-traded funds recorded outflows last week. Holdings of
the world's largest gold ETF, New York's SPDR Gold Trust <GLD>,
fell 21.7 tonnes last week. []
London's ETF Securities said its largest gold-backed
exchange-traded product, Gold Bullion Securities <GBSx.L>, saw
an outflow of 2.3 percent in the week to Friday. []
Among other precious metals, spot platinum <XPT=> was bid at
$1,164.00 an ounce against $1,159.50, while spot palladium
<XPD=> was at $224 an ounce against $225.50. Silver <XAG=> rose
to $12.19 an ounce against $12.04.
(Reporting by Veronica Brown; Editing by Sue Thomas)
