* Euro falls as market eyes talks on Greece rescue package
* Palladium <XPD=> hits 2-year, platinum 20-month high
(Updates prices and comments)
By Humeyra Pamuk
LONDON, April 21 (Reuters) - Gold trimmed earlier gains on
Wednesday, as the euro fell broadly but the metal managed to
hold its ground as worries about Greece's fiscal problems
spurred some safe-haven buying.
Platinum group metals (PGM) hovered close to their highest
in about two years as investors bet on rosy demand outlook, but
sentiment looked shaky with investors fretting over the outcome
of talks between the IMF and the European Union on a bailout
package for debt-laden Greece. []
Spot gold <XAU=> was at $1,141.75 an ounce by 1504 GMT,
versus $1,139.50 an ounce late in New York on Tuesday. It hit a
two-week low of $1,123.15 on Monday.
"Euro's coming off a bit and it puts pressure on gold," said
Commerzbank trader Michael Kempinski.
The euro fell broadly as spreads between Greek and German
bond yields hit a 12-year high, highlighting uncertainty about
how Athens would resolve its debt crisis. []
Kempinski said the worries about the health of the economies
and whether the measures to curb debt will lead to inflationary
pressures were also buoying bullion prices.
"There's some safe-haven buying at the moment, from the
private customers. It is not panic buying but it continues. The
next step is how to bring down debt and that's only by
inflationary solutions," he said.
ETFS Physical Gold (PHAU) said it saw the largest inflows in
eight months, with inflows surging $160 million last week and in
period when the gold price was falling.
"Long-term strategic investors may be taking advantage of
recent gold price weakness to further build long positions," it
said in a report.
"While short term gold price movements will likely continue
to be affected by moves in the dollar, longer-term structural
concerns about the potential implications of rising government
debt burdens for fiat currencies and inflation, will likely keep
demand for gold from strategic investors high."
U.S. gold futures for June delivery <GCM0> advanced to
$1,142.6 an ounce, after settling at $1,139.20 on the COMEX
division of the New York Mercantile Exchange.
BRIGHT FUTURE FOR PGMs
The star performer of the precious metals complex remains
the platinum group metals (PGM).
Palladium and platinum, both used to clean auto emissions
and in jewellery, have been in favour as they are considered to
be more sensitive than gold to economic recovery.
They have risen by 39 and 18.5 percent respectively so far
this year, compared with gold's 4.4 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on 2010 price performance, click:
http://graphics.thomsonreuters.com/10/CMD_PRFG0410.swf
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"The underlying fundamentals of platinum and palladium are
significantly better than gold in our view," said analyst Daniel
Major at RBS. "You've got the supply side constrained....and
much more positive outlook for demand," he said.
Spot platinum <XPT=> rose to $1,737.50 an ounce, its highest
since August 2008 and was at $1,728.50 an ounce, versus $1,714
an ounce. Palladium <XPD=> hit a two-year high at $568 an ounce,
and was last at $564 an ounce versus $549 an ounce.
For a story on gold and platinum ratios, click on
[]
Chinese car sales have been strong so far this year, growing
by almost two-thirds last month as buoyant consumer sentiment
lifted spending, while other leading car markets, notably the
United States, are also recovering from last year's slump.
Silver <XAG=> was at $17.92 an ounce from $17.81 an ounce.
(Editing by James Jukwey)
