* Moody's downgrade of Greece lifts risk aversion * SPDR gold ETF holdings stay at record above 1,306 T * Gold-silver ratio drops to two-week low
* Coming Up: U.S. Empire State manufacturing survey 1230 GMT
(Updates prices)
By Jan Harvey
LONDON, June 15 (Reuters) - Gold firmed in Europe on Tuesday as a ratings downgrade of Greece rekindled fears of a worsening fiscal crisis and raised interest in the metal as a haven, while curbing appetite for nominally higher-risk assets like stocks.
Spot gold <XAU=> was bid at $1,223.65 an ounce at 1205 GMT, against $1,220.15 late in New York on Monday. U.S. gold futures for August delivery <GCQ0> eased 40 cents to $1,224.90.
While analysts said Moody's downgrade of Greece's government bond ratings into junk territory was expected, it reminded investors that Europe's debt crisis was not over. [
]"There is every reason to think gold is going to continue to be supported by this general nervousness over Europe and, much further out, the issue of dislocation created by fiscal stimulus plans," said Societe Generale analyst David Wilson.
"Our forecast is that we will still see new highs in the second half of the year," he added. Gold's current record high is $1,251.20 an ounce, set last week.
The euro <EUR=> pared earlier losses triggered by the Greek downgrade. Gold has adopted an unusual negative correlation with the euro recently as it acts as a hedge against weakness in the single currency. [
]European shares also returned to positive territory, although concern over the euro zone's finances was never far from investors' minds. [
] [ ]The cost of insuring against a default by peripheral euro zone government bond issuers rose on Tuesday as Moody's downgrade of Greece refocused market attention on the euro zone debt crisis. [
]The markets are now looking ahead to a spate of U.S. data due later this session, including May import/export prices and the Empire State manufacturing survey at 1230 GMT. If this beats consensus, better risk appetite could hurt gold.
PHYSICAL DEMAND IMPROVES
Physical demand for gold firmed a touch in Asia as prices slipped from record highs. Sales of scrap in the world's number one consumer, India, subsided although domestic prices were within sight of record levels. [
]Firm demand for physical bullion from investors also kept holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust <GLD>, at record highs above 1,306 tonnes on Monday.
From a technical perspective, the outlook for the precious metal is positive, said analysts who study charts of past price movements to determine the future direction of trade.
"The metal spent the last three days consolidating between $1,215 and $1,238, and probability now lies with the bullish trend for another attempt on its record high," said ScotiaMocatta in a note.
Silver <XAG=> tracked gold higher to $18.31 an ounce against $18.16.
The ratio of gold to silver -- how many ounces of silver are needed to buy an ounce of gold -- fell to a two-week low on Tuesday at 66.73, showing the metal is becoming increasingly expensive compared with gold.
Platinum <XPT=> was at $1,550 an ounce against $1,557, and palladium <XPD=> was at $452.33 against $455.50, declining in line with other industrial metals.
Morgan Stanley upgraded the U.S. auto industry to "attractive" from "in-line" and said it sees higher levels of sustainable profitability for the sector, driven by restructuring, capacity rationalization and higher utilisation. [
] (Editing by Sue Thomas)