* Euro on track for best week this year, equities firm
* SPDR gold ETF holdings hit record above 1,300 T
* Silver, platinum outperform gold as risk aversion recedes
(Updates prices, adds comment, graphic)
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 $1,220.05 an ounce at 1131 GMT,
against $1,215.80 late in New York on Thursday. U.S. gold
futures for August delivery <GCQ0> was flat at $1,222.20.
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.
"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 rose on Friday on the back of higher shares, but
the single currency struggled to extend its short-covering rally
versus the dollar ahead of technical resistance. []
The euro is on track for its best week of the year, however,
while gold is currently little changed from last Friday's level.
European shares firmed for a third session amid optimism
over global growth despite Europe's debt woes, while U.S. stock
futures indicated a higher open on Wall Street. [] []
Sharp falls in equity values and the euro this year had
benefited gold as an alternative asset.
"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 nearly 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. []
"This trend shows that medium to long-term investors see
further risks on the horizon and view the lower gold price as an
opportunity to buy," said Commerzbank in a note.
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.
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To watch an Reuters Insider Television interview on gold
technicals with Sucden Financial's Head of Research Brenda
Sullivan, click here: http://link.reuters.com/bex39k
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Among other precious metals, silver <XAG=> was at $18.30 an
ounce versus $18.19, platinum <XPT=> at $1,541.60 an ounce
versus $1,534, and palladium <XPD=> at $449.05 against $450.50.
"Other precious metals have started to outperform gold with
the gold to silver ratio tumbling below 68 having made highs
near 70 earlier this week," said VTB Capital analyst Andrey
Kryuchenkov. "The platinum to gold ratio nudged to 1.25."
(Reporting by Jan Harvey; Editing by Keiron Henderson)
