* Euro drops as Greek/German bond yield spreads widen
* Germany says has not committed to Greek financial aid
* Euro-priced gold hits record high at 868.26 euros/oz
* Coming up: Fed monetary policy meeting starts Tuesday
(Updates prices)
By Jan Harvey
LONDON, April 26 (Reuters) - Gold held above $1,155 an ounce
in Europe on Monday, largely shrugging off euro weakness, as
uncertainty over how and when Greece would receive financial aid
boosted the metal's appeal as a haven from sovereign risk.
Spot gold <XAU=> hit a peak of $1,159.73 an ounce in earlier
trade, its highest since April 15, and was at $1,156.75 an ounce
at 1248 GMT versus $1,155.90 late in New York on Friday.
The combination of risk-averse buying and euro weakness took
euro-priced gold <XAUEUR=R> to a record 868.40 euros an ounce.
The euro slipped on Monday as the spread between Greek and
German bond yields widened after Germany said it had not yet
committed to providing financial aid to Greece. []
While euro weakness would usually weigh heavily on gold,
other factors are supporting the precious metal, analysts said.
"Gold tends to attach itself fairly reliably to the euro
until there is something going on that causes a detachment,"
said Peter Hillyard, head of metals sales at ANZ Bank in London.
"Demand is coming from the investor community," he said. "It
is a view being held by many -- a technically held view, a
currency view, a Greek view if you like -- that $1,250 is where
this market is headed, probably between now and year-end."
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the New York Mercantile Exchange rose $3.70 to
$1,157.40 an ounce.
Concerns over the outlook for smaller euro zone economies
like Greece have pressured euro 7 percent lower versus the
dollar this year, but gold is up 5 percent in the same period as
sovereign risk fears have lifted interest in bullion as a haven.
These worries are lingering, despite Greece's finance
minister saying on Sunday that aid from the EU and IMF would
arrive in time to avert what would be the euro zone's first
sovereign debt default. []
CLARITY SOUGHT
"The markets hope for clarity yet each step in this saga
seems to raise more questions than it answers," said Credit
Agricole in a note.
"Now that the question of when Greece will finally ask for
the emergency funding has been answered, we wonder instead when
the money will arrive, who it will be provided by, and will the
funding be available given the threat of legislative and
constitutional objectors?"
Markets are now awaiting the outcome of a two-day meeting of
the U.S. Federal Reserve starting on Tuesday. The Fed is
expected to keep interest rates unchanged near zero and repeat
its pledge to keep them low for an extended period. []
Figures from the U.S. Commodity Futures Trading Commission
showed net long positions in New York gold futures fell slightly
last week, but analysts say the drop was slight given the
strength of the rise in positioning earlier this month.
"While the metal has taken a step back from nearing the all
time positioning high, there is just 4.4 million ounces of a gap
to the Oct. 2009 record," said UBS analyst Edel Tully in a note.
"Considering how fast and furious buyers rushed into the
market in the first half of April and alongside the volatile
price action in the week to April 20, it is somewhat comforting
that the net long exodus was contained at 0.8 million ounces."
Among other precious metals, silver <XAG=> was at $18.36 an
ounce against $18.27, platinum <XPT=> at $1,747 an ounce against
$1,740, and palladium <XPD=> at $569.50 against $562.50.
Platinum and palladium prices have both benefited this year
from a recovery in automotive demand, which accounts for around
half of global consumption of the metals.
(Editing by Sue Thomas)
