* 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. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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)