* Euro retreats, stocks decline after U.S. retail sales data
* 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 extended gains in Europe on
Friday as weaker-than-expected U.S. retail sales data brought
risk aversion back to the market, pressuring stocks and the euro
and boosting interest in bullion as a safe haven.
But the metal is struggling to make significant headway
after hitting a record $1,251.20 an ounce earlier this week,
having fallen 1 percent on Thursday as risk appetite recovered
and investors worried the market had become overstretched.
Spot gold <XAU=> was bid at $1,225.25 an ounce at 1248 GMT,
against $1,215.80 late in New York on Thursday. U.S. gold
futures for August delivery <GCQ0> rose $4.70 to $1,227.00.
"The retail sales numbers out of the U.S. aren't really
supportive for the recovery, but I don't think they're
necessarily bad enough to warrant a rush back into gold," said
RBS Global Banking & Markets analyst Daniel Major.
"I think gold is going to struggle, provided we don't get
another bout of extreme risk aversion."
The euro turned lower on Friday after data showed a surprise
decline in U.S. retail sales in May, sparking concern about the
strength of the U.S. economic recovery. The Commerce Department
said total retail sales fell 1.2 percent. [] []
Europe's top shares turned negative after the data, which
has returned the focus to concerns about economic growth. U.S.
stock index futures also fell. [] []
Sharp falls in equity values and the euro this year had
benefited gold as an alternative asset.
"Demand for gold as a safe haven and an alternative currency
remains, though maybe not in the heightened way it was a few
weeks ago," said Credit Agricole analyst Robin Bhar.
Oil prices also extended losses after the data, dropping
more than $1 a barrel. []
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. []
OPPORTUNITY TO BUY
"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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Silver <XAG=> was at $18.43 an ounce versus $18.19, platinum
<XPT=> at $1,537.50 an ounce versus $1,534, and palladium <XPD=>
at $447.50 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."
(Editing by Sue Thomas)
