* Gold rises to less than $10 under all-time high
* U.S. stock markets erase gains; euro stays volatile
* SPDR gold ETF holdings retreat from record
* Coming up: U.S. April consumer confidence data on Tues
(Recasts, updates prices, adds comment)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, June 7 (Reuters) - Gold rallied to less
than $10 below its all-time high on Monday, as funds piled in
for safety in the wake of weaker equity markets due to ongoing
fears about euro zone credit contagion.
Silver also posted its highest gain in a month as
short-term traders bought the metal on gold's coattail, while
platinum group metals retreated on concerns that stagnant
growth in Europe could hurt autocatalyst demand.
In early sessions, gold had traded as low as $1,210.15 an
ounce as initial gains in the U.S. stock markets dented
safe-haven demand.
The metal, however, hit a three-week high of $1,239.25
later as equity markets turned lower and as the euro hovered
near a four-year low against the dollar on lingering credit
fears.
"It's a combination of short-covering and more concern
about the European debt crisis," said Bruce Dunn, vice
president of trading at New Jersey-based Auramet Trading.
"It's just a safe-haven play. In euro terms, gold keeps on
making new highs."
Spot gold <XAU=> was at $1,237.05 an ounce at 12:43 p.m.
EDT (1643 GMT), against $1,218.00 late in New York on Friday.
U.S. gold futures for August delivery <GCQ0> rose $21.20 to
$1,238.90.
Gold denominated in euros <XAUEUR=R> hit a record high of
1,036.34 euros an ounce. Euro gold prices have risen 35 percent
so far this year. In dollar terms, gold hit an all-time peak of
$1,248.95 an ounce set on May 14.
"This morning, day traders took a view that we would
probably see gold down below $1,200, where they could run a few
stops and pick it up cheaper," said Peter Hillyard, head of
metals sales at ANZ Bank. "I think they got caught (out)."
"The market is on a longer-term and sustainable uptrend,"
he added. "If you detach yourself from the minute by minute,
this market is heading higher."
Gold has been lifted by volatility in the wider financial
markets this year, benefiting particularly from fears over euro
zone sovereign debt levels, which have battered the euro.
The euro <EUR=> tumbled to a four-year low versus the
dollar, breaking below $1.19. European shares were down 1
percent by midafternoon. [] []
U.S. stocks also erased early gains to trade unchanged.
[]
Meanwhile the 10-year German Bund yield hit a record low as
worries grew that fiscal problems in Hungary may worsen the
European debt crisis. []
The single currency is 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.
GLD HOLDINGS FALL
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 time 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=> rose to $18.06 an ounce 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.
Elsewhere platinum <XPT=> was at $1,507 an ounce against
$1,510, and palladium <XPD=> was at $424 against $423.75, both
caught up in selling of other industrial metals.
Prices at 12:54 p.m. EDT (1654 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1237.80 21.60 1.8 1096.20 12.9
US silver <SIN0> 18.070 0.771 4.5 16.845 7.3
US platinum <PLN0> 1514.00 -11.30 -0.7 1471 2.9
US palladium <PAM0> 423.00 -6.80 -1.6 408.85 3.5
Gold <XAU=> 1237.15 19.15 1.6 1096.35 12.8
Silver <XAG=> 18.04 0.69 4.0 16.84 7.1
Platinum <XPT=> 1510.50 0.50 0.0 1465.50 3.1
Palladium <XPD=> 425.00 1.25 0.3 405.50 4.8
Gold Fix <XAUFIX=> 1215.00 2.60 0.2 1104 10.1
Silver Fix <XAGFIX=> 17.36 -40.00 -2.3 16.99 2.2
Platinum Fix <XPTFIX=> 1500.00 5.00 0.3 1466 2.3
Palladium Fix <XPDFIX=> 423.00 2.00 0.5 402 5.2
(Reporting by Frank Tang and Jan Harvey; Editing by Sofina
Mirza-Reid)
