* SPDR Trust holdings rise to record above 970 tonnes
* Total gold ETC holdings up 200 tonnes this year
* Investors prepare for inflation surge
(Updates prices, adds comment)
By Pratima Desai
LONDON, Feb 13 (Reuters) - Gold prices slipped on Friday as
fears of financial meltdown receded, but analysts say investors
expecting only a brief respite from the maelstrom will carry on
piling into the precious metal.
Traders said short term investors selling their holdings
ahead of a U.S. holiday on Monday weighed on gold.
Firmer equities and news that the United States was working
on a programme to subsidise mortgages for homeowners before they
fall into loan arrears also hit gold market sentiment. []
Rising hopes of financial stability prompted a bout of
profit-taking which took spot gold <XAU=> to a session low of
$931.40 an ounce. At 1527 GMT it was at $932.70/934.70 an ounce
from $945.05 late in New York on Thursday.
" A lot of bad news, for this week at least, seems to have
been priced in," said Michael Widmer, analyst ay BNP Paribas.
The escalating crisis in the banking sector has pushed up
gold prices by about 40 percent since late October last year.
"The bull case for gold is that it is a safe haven," said
Tom Gidley-Kitchin, an analyst at brokers Charles Stanley.
Higher prices are reflected in the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>. The
fund's holdings reached a record above 970 tonnes as of February
12, a 30 percent jump since the end of October.
"This means that SPDR's gold holdings are now close to the
level of those of the world's sixth largest holder of gold, the
Swiss National Bank, which held 1,040 tons of gold in its vaults
at the end of December," Commerzbank said in a note
"The Perth Mint reports an unprecedented demand for gold in
the last three months, mainly from U.S. investors. According to
the Mint, the value of the gold holdings by investors had
doubled in the past year to comfortably over $2 billion."
DRAMATIC APPETITE INCREASE
Total exchange traded product holdings have risen at their
fastest ever rate so far this year, growing by 200 tonnes to
almost 1,400 tonnes, Barclays Capital said in a note.
"Prices continue to appreciate steadily, but what really
stands out is the dramatic increase in appetite for physical
gold among investors."
Benchmark gold futures <GCJ9> eased 1.5 percent to $935 an
ounce. The contract hit a record record $1,050 in March 2008.
Spot gold too hit a record -- $1,030.80 -- last March.
Many now expect investment demand to help push prices
towards these levels.
Others think a new record could be set should inflation take
off next year because of the large amounts of money being pumped
into the global economy by central banks and governments to
boost growth and confidence.
Spot platinum <XPT=>, tracking gold, also slipped to
$1,051/1,061 an ounce from $1,073 an ounce on Thursday.
Deteriorating sales and bleak prospects in the auto sector
have contributed to platinum's fall in recent months. Latest
data showed a 27 percent collapse in car registrations in Europe
last month. []
The metal used in autocatalysts to clean car emissions is
expected to stay under pressure.
Palladium <XPD=> was at $212/216 an ounce from $213.50 and
silver <XAG=> at $13.30/13.38 from $13.46 on Thursday.
(Editing by Peter Blackburn)
