* Irish government to map out 4-year plan
* Euro-gold outperforms, at highest since June
* Coming up: U.S. initial claims, durable goods; 1330 GMT
(Adds comment, refreshes prices)
By Amanda Cooper
LONDON, Nov 24 (Reuters) - Gold steadied on Wednesday as
mounting concern about the risk that Ireland's debt crisis could
spread to other euro zone economies pushed the euro price of
bullion to its highest level since June.
A deadly exchange of military fire between North and South
Korea on Tuesday has further unsettled investors, putting Asian
stocks under pressure and encouraging a sweep into perceived
safe havens such as gold, government bonds and the Swiss franc.
[]
The dollar hit two-month highs against a basket of
currencies <.DXY>, providing a head wind for gold, which usually
weakens in response to dollar strength.
But on Wednesday, this inverse relation reached its weakest
level in two months, allowing spot gold <XAU=> to hold
relatively steady at $1,375.40 an ounce by 1155 GMT, little
changed from $1,376.20 late in New York on Tuesday. U.S. gold
futures <GCZ0> dipped 0.2 percent to $1,375.80.
"Euro-gold is up to the 1,030 (euro) mark ($1,380) that ...
suggests there is added support to this safe-haven factor," said
Citi analyst David Thurtell.
The euro hit two-month lows on Wednesday as spreads on
peripheral euro zone bonds such as Portugal and Spain hit record
highs, while gold priced in euros <XAUEUR=R> rallied to its
highest level since early June.
"Gold's been gritting its teeth in the last couple of days
and going contrary to what one might have expected with the
dollar move, and really that has to boil down to the
uncertainty," said Ole Hansen, a senior manager at Saxo Bank.
"We've got political risk from the Korea situation and then
more importantly ... people are talking about the potential of
the euro not surviving. I don't see that happening, but just the
fact that it is being talked about is enough to raise the bar."
PAIN
In Ireland, the government said it will explain on Wednesday
how it plans to save 15 billion euros over the next four years,
inflicting more pain on voters to prove that it can tackle the
country's debt. []
"I am not sure if the market is completely convinced that
the tension would lead to something more," said Darren
Heathcote, head of trading at Investec Australia in Sydney.
"I think it's being pushed and pulled by the euro as well at
the moment."
Bullion dealers in Singapore noted selling of gold bars and
scraps from consumers in Indonesia and Thailand, but China saw
buying on dips related to the tension in Korea.
Gold's negative correlation to the dollar reached its
weakest since mid-September as investors ditched the euro and
other risk-related assets such as stocks and corporate debt.
In terms of factors fuelling a bid for safe-haven
investments, Michael Widmer, a strategist with Bank of
America-Merrill Lynch, said the euro zone debt crisis was the
dominant one.
"If you go back through the past 10 or 20 years, you look at
how gold prices react to geopolitical uncertainty, those
uncertainties were relatively positive. But you don't tend to
see a sustainable impact on prices if it's just a one-off, and
that is probably the same thing this time around as well," he
said, referring to the tensions between the two Koreas.
Holdings of gold in the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, were unchanged
for a second day, indicating no large-scale withdrawal from gold
by investors.
Silver <XAG=> eased, releasing earlier gains to last trade
at $27.38 an ounce, down 0.4 percent on the day.
Holdings in the iShares Silver Trust <SLV>, the world's
largest physically-backed exchange-traded fund, rose to record
highs for three consecutive sessions, signalling strong
investment demand in the metal, seen as an alternate investment
from gold. []
Platinum <XPT=> rose 0.6 percent to $1,657.74 an ounce,
recovering from two straight days of declines, while palladium
<XPD=> broke a two-day decline and rose 0.2 percent to $687.72,
ahead of the release of economic data in the United States
including weekly jobless figures, monthly durable goods orders
and new home sales.
(Editing by Jane Baird)
