* Gold rises as concerns over euro zone, Korea linger
* Silver, PGMs rise in gold's wake
* Upcoming: US GDP Q3 final, Nov home sales on Wed
(Recasts, updates prices, market activity)
By Carole Vaporean and Amanda Cooper
NEW YORK/LONDON, Dec 20 (Reuters) - Gold rose on Monday,
even as the euro weakened, as investors sought a safe haven
when the European Central Bank issued a warning about the
region's finances and Moody's said it may cut debt ratings for
some Spanish banks.
Tensions on the Korean peninsula also fed the safety bid
for gold after an artillery firing drill by the South Korean
military on a disputed island near the border with the North.
[]
Spot gold <EAU=> was more than 0.5 percent higher at
$1,384.0 an ounce by 1537 EST (2037 GMT), having touched an
intraday high of $1,388.05 in early dealings. U.S. gold futures
for February <GCG1> closed with gains of 0.5 percent, or 6.9
cents, at $1,386.10 an ounce.
Gold's gains came in a narrow trading range in light
action. Some analysts said the precious metal should remain in
a consolidation mode until year end.
"Overall, it looks like consolidation. I don't see any
major driver. That's partly due to a shortened trading week in
the U.S. I wouldn't be surprised to see gold remaining
relatively calm this week," said Carlos Sanchez, precious
metals analyst at CPM Group in New York.
He noted that the U.S. economic calendar will also be light
for the remainder of 2010.
The metal briefly slipped to a session low of $1,375.84 an
ounce as the euro extended losses after ratings agency Moody's
said it may cut some Spanish banks' ratings, but quickly
rebounded on demand for the metal as a haven from risk. []
"It looks to have caught a bit of a safe haven bid," said
Citigroup analyst David Thurtell. "But it's very quiet. Gold
has traded a very small range since an hour after the Asian
open."
He also said he expected the metal to remain in a
relatively narrow range into year-end.
"Most funds have stopped for the year and won't come back
until the New Year," he said.
Gold, which has risen by over 25 percent so far this year,
is on track for a fourth successive month of gains.
Greater inflows into bullion-backed, exchange-traded funds
and increased open interest in U.S. futures have helped fuel
gold's price rise this month.
Looking to 2011, some observers said they think gold can
head higher, judging by its ability to maintain lofty levels
even in a thin pre-holiday trade.
"We would expect increased activity when the year begins.
We expect prices to set records in the first half of next year
based on the same economic back drop as we've seen throughout
this year--concerns over Europe and the U.S., but with upward
inflationary pressures in developing countries," said Sanchez.
In the meantime, as prices consolidate, analysts said to be
ready for a tug-of-war, even if the range is limited.
"There seems to be an overwhelming belief that the market,
as it is now, is pointing higher, but we need to see the third
of January come first and see how it plays out," said Saxo Bank
senior manager Ole Hansen.
Holdings of gold in the world's largest gold-backed ETF,
the SPDR Gold Trust <GLD>, rose for the first time since early
December, to 1,298.94 tonnes, reflecting investor demand for
bullion. []
UBS precious metals strategist Edel Tully said global ETF
holdings are now at a record 69.2 million ounces and pointed to
a pick-up in European coin demand late last week.
With no real clarity emerging from a two-day summit of EU
leaders last week, the euro looked likely to encounter more
pressure. But the same safety bid that was helping the dollar,
also supported gold prices. [].
Silver recaptured early gains late in the session, with the
spot price <XAG=> at $29.36 an ounce. It was still up nearly 75
percent this year at its highest since early 1980.
iShares Silver Trust <SLV>, the largest silver-backed ETF,
said its holdings fell to 10,903.34 tonnes by Dec 17 from a
record 10,964.14 tonnes on Dec 14.
Platinum <XPT=> was last higher at $1,705.24 an ounce, and
palladium <XPD=> rose to $739.47.
Prices at 4:11 p.m. EST (2111 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCG1> 1386.10 6.90 0.5% 26.4%
US silver <SIH1> 29.355 0.222 0.0% 74.3%
US platinum <PLF1> 1710.70 12.20 0.7% 16.3%
US palladium <PAH1> 744.75 6.15 0.8% 82.2%
Gold <XAU=> 1383.20 10.20 0.7% 26.1%
Silver <XAG=> 29.36 0.26 0.9% 74.3%
Platinum <XPT=> 1704.99 8.49 0.5% 16.3%
Palladium <XPD=> 739.47 2.47 0.3% 82.4%
Gold Fix <XAUFIX=> 1380.00 -1.00 -0.1% 25.0%
Silver Fix <XAGFIX=> 29.21 43.00 1.5% 71.9%
Platinum Fix <XPTFIX=> 1704.00 4.00 0.2% 16.2%
Palladium Fix <XPDFIX=> 747.00 5.00 0.7% 85.8%
(Additional reporting by Jan Harvey; Editing by David
Gregorio)
