* Gold outperforms sliding commods amid safe-haven buying
* European shares, euro extend losses as jitters persist
* SPDR gold ETF holdings retreat from record
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, June 7 (Reuters) - Gold eased on Monday, caught up
in the sale of other assets as equity markets fell for a second
session and as high prices discouraged fresh buying.
Spot gold <XAU=> was bid at $1,213.05 an ounce at 1207 GMT,
against $1,218.00 late in New York on Friday. U.S. gold futures
for August delivery <GCQ0> eased $2.40 to $1,215.30.
"The price at $1,200 is quite high for anybody to get into
the market," said Afshin Nabavi, head of trading at MKS Finance.
"The open position on Comex is showing quite hefty longs
already, so it will need a correction to generate fresh
interest."
European shares slid for a second day on Monday on renewed
investor fears over euro zone debt levels after Hungary said on
Friday its debt problems were similar to those of Greece. []
World stocks also fell sharply as investors reacted to signs
the U.S. economic recovery may be slowing after payrolls data
disappointed investors on Friday. []
"The danger for gold right now is being caught in the
crossfire of other assets falling, triggering margin calls,"
said UBS analyst Edel Tully in a note.
The cost of protection against a government debt default
also rose for France and several peripheral euro zone countries
as concern grew over Hungary's debt levels. []
The new Hungarian government spooked investors on Friday
when a prime minister's spokesman said he supported the view the
country had only a slim chance of avoiding the kind of debt
crisis that plunged Greece into financial instability.
The euro <EUR=> recovered some ground after hitting its
lowest in more than four years against the dollar on Monday, but
investors remain nervous about further losses in the currency
after a clear break below chart support at $1.2135. []
Its slide helped euro-priced gold <XAUEUR=R> hit a record
1,025.72 euros an ounce on Monday, though it later slipped down
to 1,014.93 an ounce as the euro lifted from lows.
The single currency is still down more than 16 percent this
year versus the dollar on concerns about government debt. A
strong dollar usually pressures gold, but the relationship has
weakened as both are being purchased to protect against risk.
OTHER COMMODITIES PARE LOSSES
Other commodities also pared losses after earlier coming
under pressure. Oil steadied after falling more than 1 percent
and base metals came off lows. [] []
In investment news, holdings of the world's largest
gold-backed exchange-traded fund, New York's SPDR Gold Trust
<GLD>, eased a touch on Friday to 1,286.359 tonnes from a record
1,289.839 tonnes the previous day. []
At the same timr holdings of the biggest silver-backed ETF,
the iShares Silver Trust <SLV>, fell more than 45 tonnes to
9,208.83 tonnes.
On Monday spot silver <XAG=> held at $17.34 an ounce, little
changed from late Friday's level of $17.35.
"From a fundamental perspective, silver's price performance
was detached from its underlying supply and demand dynamics last
year, and instead robust investor interest led the metal to
outperform gold," said Barclays Capital in a weekly note.
"This year, we expect fabrication demand growth to outpace
supply growth; however, we also expect the market to remain in a
sizeable surplus, thereby once again exposing the price outlook
heavily to investor appetite."
Elsewhere platinum <XPT=> was at $1,498.90 an ounce against
$1,510 and palladium <XPD=> was at $419 against $423.75, both
caught up in selling of other industrial metals.
(Reporting by Jan Harvey; Editing by Jane Baird)
