* Risk appetite returns to markets on hopes for EU aid plan
* Euro, stocks, industrials rise, "safe haven" assets fall
* Platinum Week enters second day in London
(Updates prices)
By Jan Harvey
LONDON, May 18 (Reuters) - Gold slipped below $1,210 an
ounce on Tuesday and assets seen as higher risk like stocks and
the euro rose on hopes euro zone officials are making progress
on a package of measures to resolve the euro zone's debt crisis.
Spot gold <XAU=> was bid at $1,208.35 an ounce at 1220 GMT,
against $1,223.00 late in New York on Monday. U.S. gold futures
for June delivery <GCM0> on the COMEX division of the New York
Mercantile Exchange fell $19.10 to $1,209.00 an ounce.
Concerns that the fiscal problems of debt-laden Greece would
occur elsewhere in the euro zone drove gold to a record
$1,248.95 an ounce last week and knocked other assets. That
situation has since reversed, analysts said.
"Gold was definitely in overbought territory, because people
were afraid," said Commerzbank analyst Eugen Weinberg. "Fears
were fuelled by problems surrounding the Greece crisis. (But) at
the moment risk appetite is coming back to the market a little."
"The dollar is weaker, and the gold price as well, because
they were both seen as safe havens and until recently profited
from this status. With the return of risk appetite, it's logical
that they are both under pressure."
Investors were cheered by news that aid for Greece was
arriving as planned, after officials said the country received a
14.5 billion euro emergency loan from the EU and would use some
of the money to repay an 8.5 billion euro bond. [].
This narrowed the 10-year Greek/German government bond yield
spread and cut the cost of insuring against a Greek default.
The euro <EUR=> rose 0.2 percent against the dollar, while
European shares climbed 1.4 percent after a rally on Wall Street
on Monday. U.S. stock futures pointed to a higher opening among
New York equities. [] [] []
Oil prices also recovered some of their recent losses to
climb more than 3 percent as risk appetite returned, with dollar
weakness and strong Chinese demand helping prices rise. []
INVESTMENT FIRM
Investment demand for gold remained high, with holdings of
the world's largest gold-backed exchange-traded fund, New York's
SPDR Gold Trust <GLD>, rising just over three tonnes on Monday
to a record 1,217.108 tonnes. []
Among other precious metals, silver <XAG=> was flat at
$18.75 an ounce. Platinum <XPT=> was at $1,674 an ounce against
$1,666, and palladium <XPD=> at $499.60 against $504.
London's Platinum Week entered its second day in Tuesday,
with analysts, traders, refiners and recyclers meeting in the
British capital to discuss industry developments. For coverage
of the event, click on []
Refiner Johnson Matthey kicked off proceedings on Monday
with the release of its Platinum 2010 report, in which it said
it expects the market to move closer to balance this year after
swinging into surplus of 285,000 ounces last year.
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For a graphic showing Johnson Matthey's evaluation of the
platinum market's supply and demand fundamentals, click on:
http://graphics.thomsonreuters.com/10/PLT_SDH0510.gif
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"The fundamentals for platinum and palladium remain
reasonably robust with a diverse range of uses having been able
to offset some of the weaknesses," said analyst John Meyer at
investment bank Fairfax in a note.
"South African miners continue to struggle and although they
are likely to be making money again, we suspect that... major
developments remain a lower priority for now."
The chief executive of Anglo Platinum <AMSJ.J>, the world's
biggest miner of the white metal, said on Monday the company
expects to produce more than the 2.5 million ounces of metal it
previously forecast in 2010. []
(Editing by James Jukwey)
