PRECIOUS-Gold softens as investors pick up euro, shares

                                
 * Gold firmer, SDPR holdings hit record
                                
 * For the technical outlook for gold see: [ID:nSGE64Q00P]
                                
 * COMING UP: Japan May CPI data, due at 2330 GMT [MI/DIARY]
                                
 
                                
 (Updates prices, adds comment)
                                
 By Rebekah Curtis
                                
 LONDON, May 27 (Reuters) - Gold pared gains on Thursday,
receding from a one-week high as rallies in the euro and
equities capped the metal's safe-haven appeal, but losses were
limited by fears of more euro zone debt problems ahead.
                                
 Spot gold <XAU=> was at $1,208.65 an ounce by 1306 GMT, up
from $1,209.90 late in New York's on Wednesday. The precious
metal has risen by about 3 percent so far this week and hit a
session high of $1,218.35, its highest since May 19.
                                
 "Gold is still being driven by fear, not by greed, and the
fear seems to be leaving the market at the moment with equities
and commodities markets higher...and a stronger euro," said
Eugen Weinberg, an analyst at Commerzbank.
                                
 "The fear seems to be a little bit lower today."
                                
 Investors have taken refuge in bullion in recent weeks,
favouring its safe heaven appeal and ditching the euro on fears
the euro zone debt crisis could deepen. Gold hit a record high
of $1,248.95 in mid-May. 
                                
 The euro and equities rallied versus the dollar after China
denied a report it was reviewing its investments in euro zone
debt and the Kuwait Investment Authority denied reports it was
cutting its exposure to euro zone investments. [USD/] <.DXY>
                                
 Bullion dropped to a two-week low last week as investors
sold the metal to cover losses in equities but analysts said the
subsequent recovery showed sentiment was still bullish.
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For a graphic showing the gold technical outlook, see:
 http://graphics.thomsonreuters.com/gfx/WT_20102705090254.jpg
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 Underpinning gold was data on Thursday showing the U.S.
economy grew at a slower pace than previously estimated in the
first quarter, and weak U.S. jobs data. [ID:nN27230496]
[ID:nN26222013]
                                
 
                                
 ETF BOOST
                                
 Also supportive to gold, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, said its
holdings totalled 1,267.626 tonnes as of May 26, from 1,267.322
tonnes a day earlier, setting a fresh record high. [GOL/SPDR]
                                
 The World Gold Council said global gold demand would likely
rebound this year as investors buy the metal as a safe store of
value away from volatile financial markets and as consumers get
used to higher prices. [ID:nLDE64O1WQ]
                                
 U.S. gold futures for June delivery <GCM0> fell 0.4 percent
to $1,208.8 an ounce.
                                
 Platinum <XPT=> was at $1,531.60 an ounce against $1,518.50,
while palladium <XPD=> was at $450.50 against $436.50. Spot
silver <XAG=> was bid at $18.23 an ounce against $18.01.
                                
 But some analysts remained cautious on the complex.
                                
 "We have seen a small rebound across the whole precious
complex, yet we would be very careful here, as risk sentiment is
still far from ideal," said Andrey Kryuchenkov, analyst at VTB
Capital.
                                
 (Editing by Amanda Cooper)