* Euro zone debt woes hurt risk appetite, weigh on markets
* SPDR gold ETF holdings rise 6 T to record 1,146.216 T
* Prices hold near record highs in euros, Swiss francs
(Updates prices, adds comment)
By Jan Harvey
LONDON, April 27 (Reuters) - Gold hit two-week highs on
Tuesday and record peaks in euros and Swiss francs, as ratings
downgrades of Portugal and Greece fanned sovereign risk fears in
the euro zone, helping the metal shrug off weakness in the euro.
Spot gold <XAU=> hit a peak of $1,163.75 and was bid at
$1,161.95 at 1525 GMT, against $1,153.38 late in New York on
Monday. It hit record highs in euros <XAUEUR=R> at 874.70 euros
an ounce and in Swiss francs <XAUCHF=R> at 1,254.87 francs.
Standard & Poor's downgraded Portugal's ratings on concerns
about its ability to deal with high debt levels. Portuguese bond
spreads hit euro lifetime highs as investors feared the country
was the next weak link in the euro zone after Greece.
"Gold prices are rising on the back of presumably higher
sovereign risks in the euro zone after the latest downgrade of
Portugal ratings by S&P," said Commerzbank analyst Eugen
Weinberg.
"Gold seems to be defying the traditional pattern - stronger
dollar, lower gold prices - over the last weeks, pointing to
stronger perception of gold as an alternative currency."
"As the sovereign risks persist, gold prices may well mark
new highs for the year." Gold's current 2010 peak is $1,168.70
an ounce.
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the New York Mercantile Exchange rose $6.90 to
$1,160.90 an ounce.
Concern over sovereign risk in the euro zone, chiefly
debt-laden Greece, has helped gold rise nearly 6 percent this
year, despite a 7 percent fall in the euro versus the dollar,
which would normally weigh on gold.
S&P also issued a deeper cut to its ratings on Greece.
Athens is seeking help with its debts from the euro zone and the
IMF. Germany said on Monday it is ready to commit funds, but
demanded Athens take painful austerity measures. []
The spread between Greek and German government bond yields
hit its widest in 12 years on Tuesday, showing premiums demanded
by investors to hold Greek debt are rising. []
EURO, COMMODS SLIP
The euro <EUR=> slipped 1 percent against the dollar after
S&P's ratings cuts, and as financial markets awaited clarity
over talks on financial aid for debt-laden Greece. []
Concerns over sovereign risk prompted selling of other
commodities, with oil prices falling 1.3 percent towards $83 a
barrel and base metals prices declining. [] []
Stock markets also slipped, with European shares dropping
sharply and U.S. stocks also lower. []
Investment demand took holdings of the world's largest
gold-backed exchange-traded fund, New York's SPDR Gold Trust
<GLD>, rose more than 6 tonnes to a record 1,146.216 tonnes on
Monday, the fund said. []
"Concerns that Greece's debt crisis could spill over to
other euro zone countries despite the 45 billion euro rescue
package is prompting investors to put their money in safer
investment alternatives such as gold," Commerzbank said.
"As long as there is still a risk of the debt crisis
spreading, and the uncertainty that this is bringing to
financial markets, gold prices should be well supported."
Traders are now awaiting the outcome of a two-day monetary
policy meeting of the U.S. Federal Open Market Committee, which
starts on Tuesday. The Fed is expected to hold interest rates,
but will discuss how to unwind its massive stimulus package.
Elsewhere, silver <XAG=> was at $18.15 an ounce against
$18.26, platinum <XPT=> at $1,727.50 an ounce against $1,743,
and palladium <XPD=> at $556 against $564.50.
(Editing by Amanda Cooper)
