* Stock markets recover in Europe, Asia
* SPDR gold ETF holdings unchanged
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 10 (Reuters) - Gold slipped more than 1
percent in Europe on Tuesday as a recovery in equity markets
suggested investors' fear of risk was easing, denting interest
in the metal as a safe store of value.
Buying and selling of gold-backed exchange-traded funds
remained subdued, with the largest, New York's SPDR Gold Trust
<GLD>, reporting no movement in inventories on Monday.
Spot gold <XAU=> fell to $913.60/915.60 an ounce at 1240 GMT
from $920.95 late in New York on Monday.
Standard Bank analyst Walter de Wet said a move higher on
Tuesday in equities, oil and other commodities showed "people
are slightly more optimistic on the real economy".
World stocks rose after three consecutive days of declines
knocked them to six-year lows, with the MSCI world equity index
<.MIWD00000PUS> climbing 0.7 percent. []
European shares benefited from a memo from Citigroup's <C.N>
chief executive, containing reassuring comments about the bank's
performance, which helped calm fears over the embattled
financial sector. []
Among other commodities, oil held above $47 a barrel as
dealers weighed up OPEC's decision on output this weekend, while
the base metals also ticked up. [] []
The dollar fell against a basket of currencies on Tuesday,
retracing the previous day's gains. []
Gold is typically bought as an alternative investment to the
dollar and until recently moved in the opposite direction to it.
However, the link between the two assets has recently weakened,
with both now reacting to risk aversion.
BLEAK
Analysts say the bleak global economic outlook and currency
market volatility will support gold prices. Plunging equity
markets and inflation fears pushed the metal to an 11-month high
above $1,000 an ounce last month.
Swiss bank UBS -- using an econometric model based on
volatility in inflation levels, a dollar index and inflation as
measured by U.S. CPI -- said it sees an upside limit for gold of
$2,500 an ounce and a floor of $500. []
But slack jewellery buying as prices rise is likely to cap
gains, as will a surge in scrap supply.
"The past week's reports from the physical gold markets of
India and China and last week Turkey also were anything but
positive as far as jewellery demand is concerned," precious
metals trading house Heraeus said in a weekly note.
Gold demand in India was quiet on Tuesday as banks closed
for a public holiday. []
Falling jewellery demand was offset by strong buying for
gold-backed exchange-traded funds earlier in the year. That,
however, has stalled.
The SPDR Gold Trust's holdings have remained relatively
steady in the last two weeks. In comparison, they jumped by some
200 tonnes in the first six weeks of the year. []
Among other precious metals, spot silver <XAG=> slipped to
$12.76/12.83 an ounce from $12.92. Spot platinum <XPT=> fell to
$1,049.50/1,059.50 an ounce from $1,058, while spot palladium
<XPD=> was little changed at $194.50/198.50 an ounce from $194.
Both platinum group metals have suffered from fears the
recession will curb demand from carmakers, the major buyers of
the metals used in catalytic converters, and jewellers.
(Editing by Anthony Barker)
