* Euro rally runs out of steam after breaching $1.21
* SPDR gold ETF holdings hit record above 1,300 T
* Silver, platinum outperform gold as risk aversion recedes
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, June 11 (Reuters) - Gold firmed in Europe on Friday
as price-sensitive investors took advantage of the previous
day's losses to buy into the market, with underlying concerns
over European sovereign debt levels still underpinning prices.
Spot gold <XAU=> was bid at $1,219.95 an ounce at 0936 GMT,
against $1,215.80 late in New York on Thursday. U.S. gold
futures for August delivery <GCQ0> eased 20 cents to $1,222.00.
Gold slipped 1 percent on Thursday as a rise in stocks and
the euro reflected sharper appetite for nominally higher-risk
assets. The metal is still struggling to make further headway
after hitting a record $1,251.20 an ounce earlier this week.
"For the moment, concerns that the recovery would be
derailed by the sovereign debt crisis and China slowing seem to
have lessened -- not gone away, but lessened," said Credit
Agricole analyst Robin Bhar. "In that sort of environment, gold
will struggle."
"It probably needs to consolidate around the $1,200-1,220
range and secure a foothold there," he added. "Demand for gold
as a safe haven and an alternative currency remains, though
maybe not in the heightened way is was a few weeks ago."
The euro's rally ran out of steam on Friday, with the single
currency <EUR=> running into headwinds above $1.21. Profit
taking set in when it failed to push through hefty resistance,
analysts said. []
European shares firmed at the open for a third session amid
optimism over global growth despite Europe's debt woes, while
Asian stocks also climbed overnight. [] []
Sharp falls in equity values and the euro this year have
benefited gold as an alternative asset, seen as a safe store of
value at time of volatility in other markets.
"The rallies in the euro and global equity markets are signs
that risk may be receding, at least in the short term, and
this could weigh on gold and silver prices," said HSBC analyst
James Steel in a note.
Among other commodities, base metals firmed, though oil
prices fell more than 1 percent. [] []
ETF INVESTMENT STRONG
The .VIX volatility index, known colloquially as Wall
Street's fear gauge, dipped back under 30 on Friday. It rose as
high as 37.38 earlier this week, a move which corresponded with
gold's climb to record highs.
Investment demand continued to be strong, with holdings of
the world's largest gold-backed exchange-traded fund, New York's
SPDR Gold Trust <GLD>, rising 7.6 tonnes to a record 1,306.137
tonnes on Thursday. []
However Indian gold buying remained weak for a fourth day as
traders sought lower prices, though a stronger rupee helped make
the dollar-quoted asset cheaper for local buyers, dealers said.
India is the world's biggest gold consumer. []
From a technical perspective, gold's consolidation is likely
to set it up for fresh gains in the medium term, analysts said.
"Despite the recent weakness, we continue to see pullbacks
as counter trend and temporary ahead of a resumption of the
larger bulltrend," said Barclays Capital in a note.
Among other precious metals, silver <XAG=> was at $18.30 an
ounce versus $18.19, platinum <XPT=> at $1,541.50 an ounce
versus $1,534, and palladium <XPD=> at $449.53 against $450.50.
"Other precious metals have once again started to outperform
gold amid improving sentiment, with the gold to silver ratio
tumbling below 68 having made highs near 70 earlier this week,"
said VTB Capital analyst Andrey Kryuchenkov in a note.
"Also, the platinum to gold ratio nudged to 1.25, from 1.22
at the start of the week."
(Reporting by Jan Harvey; Editing by Keiron Henderson)
