* GLD holdings rise to record above 970 tonnes
* Total gold ETF holdings up 200 tonnes this year
* Long-term inflation fear, investment demand support gold
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Pratima Desai
NEW YORK/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 program to subsidize 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.
Bullion was at $937.80 an ounce at 2:02 p.m. EST (1902
GMT), down 0.8 percent from the last trade $945.05 late in New
York on Thursday.
U.S. gold for April delivery <GCJ9> settled down $7.00 at
$942.20 an ounce on the COMEX division of the New York
Mercantile Exchange.
" 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.
Higher prices are reflected in the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
popularly known as GLD. The fund's holdings reached a record
above 970 tonnes as of Feb. 12, a 30 percent jump since the end
of October.
"It tells you how worried people are about the state of our
financial system. When you see gold making new highs in many
different currencies, it shows that a lot of people are worried
about the printing of money by governments," said Joseph
Foster, portfolio manager of the $550 million Van Eck
International Investors Gold Fund in New York.
Investors expecting years of inflation and global economic
instability are pouring money into securities backed by gold
bullion, helping to turn a simple safe haven into a mainstream
asset class. []
Many traders 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 gold hit a record at $1,030.80 last March.
Commerzbank said in a note that GLD's gold holdings were
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.
Spot platinum <XPT=>, tracking gold, also slipped to $1,059
an ounce, down 1.3 percent from its last finish of $1,073 an
ounce.
The metal used in autocatalysts to clean car emissions is
expected to stay under pressure.
Palladium <XPD=> was at $214 an ounce, up 0.2 percent from
its previous close of $213.50, and silver <XAG=> was at $13.60
an ounce, up 1 percent from its previous close of $13.46 on
Thursday.
(Editing by Christian Wiessner)
