* Gold takes breather after rally; risk aversion persists
* SPDR holdings hit record 1,209.499 T as of May 12.
* Gold priced in sterling, euro hit record highs
* Coming up: U.S. April retail sales data
(Recasts, updates prices, market activity; adds second
byline, dateline, previously LONDON)
By Frank Tang and Pratima Desai
NEW YORK/LONDON, May 13 (Reuters) - Gold was nearly flat on
Thursday as the market took a breather after the metal raced to
two consecutive record highs, but jitters over a $1 trillion
European rescue plan supported prices.
Silver and platinum group metals were also unchanged as
volatile currency and equity markets showed signs of
stabilizing.
Gold's rally in dollar terms now stands at 7 percent from a
week ago. Worries about the European rescue plan sent gold
priced in euros and sterling to record highs.
Michael Daly, gold specialist at Chicago-based futures
broker PFGBest, said overnight profit-taking weighed on gold.
But he said economic uncertainties and the upcoming Indian
festival of Akshaya Tritiya, a major Indian gold-buying event,
should support prices.
"There are a lot of uneasiness with the European Union and
investors are weary right now. If central banks continue to
print money at this rate, there will be inflation to follow and
I think people are protecting their wealth" by buying gold,
Daly said.
Spot gold <XAU=> was at $1,236.55 an ounce at 12:22 p.m.
EDT (1622 GMT), nearly flat from $1,236.35 an ounce late in New
York on Wednesday, when it hit a record $1,248.15 on fears that
the massive European rescue package will not solve the euro
zone debt crisis.
U.S. gold futures <GCM0> were last up $1,233.70 an ounce,
down about $9.40 from the previous session.
Investors use gold as a hedge against financial and
political turbulence and as a store of value during times of
high inflation, which erodes wealth.
Loose monetary policy, focus on growth and some concern
that governments could use inflation to devalue their debt and
their currencies to boost economic activity is another reason
cited for gold's popularity. []
"In the kind of environment where countries compete using
their currencies, gold will of course appreciate," Brebner
said.
BONDS BUYBACKS HURT GOLD
One element of the rescue has pressured gold prices,
however. The European Central Bank's commitment to buy euro
zone government bonds has cut chances of defaults.
[]
But analysts say risk aversion still dominates market
psychology, noting that gold has moved up alongside the dollar
<EUR=> <.DXY>.
"I think we could easily see a new record high before the
weekend," said analyst Walter De Wet at Standard Bank,
referring to the spot gold price. "But also ...at these levels
smaller than usual volumes could push prices higher," he
added.
Gold priced in sterling <XAUGBP=R> rose to a record high of
848.97 pounds an ounce while euro-priced gold <XAUEUR=R>
touched an all-time high of 989.20 euros. []
Traditionally, gold moves in the opposite direction to the
dollar, since a stronger greenback makes commodities more
expensive for holders of other currencies.
Strong investor interest in gold can be seen in the
holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>, which said its holdings stood at a
record high of 1,209.499 tonnes as of May 12.
"What we have seen is, ETF holdings have been pretty sticky
and we haven't seen a lot of selling whenever the global macro
picture has improved. People tend to hold onto their holdings,"
De Wet at Standard Bank said.
Spot silver <XAG=> was at $19.48 an ounce from $19.48,
platinum <XPT=> at $1,724.50 from $1,736.50 and palladium
<XPD=> at $540.50 from $540.
Prices at 12:35 p.m. EDT (1635 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1233.10 -10.00 -0.8 1096.20 12.5
US silver <SIN0> 19.490 -0.173 -0.9 16.845 15.7
US platinum <PLN0> 1735.80 -11.50 -0.7 1471 18.0
US palladium <PAM0> 543.60 -3.85 -0.7 408.85 33.0
Gold <XAU=> 1232.45 -3.90 -0.3 1096.35 12.4
Silver <XAG=> 19.46 -0.02 -0.1 16.84 15.6
Platinum <XPT=> 1731.00 -5.50 -0.3 1465.50 18.1
Palladium <XPD=> 540.50 0.50 0.1 405.50 33.3
Gold Fix <XAUFIX=> 1237.50 2.50 0.2 1104 12.1
Silver Fix <XAGFIX=> 19.43 -16.00 -0.8 16.99 14.4
Platinum Fix <XPTFIX=> 1728.00 3.00 0.2 1466 17.9
Palladium Fix <XPDFIX=> 543.00 1.00 0.2 402 35.1
(Additional reporting by Humeyra Pamuk; Editing by David
Gregorio)
