* Gold recovers early losses, hits record high in euro terms
* Euro suffers from persistent fears over Greek debt
* Palladium prices hit 2-year high at $504/oz
(Updates prices, adds comment)
By Jan Harvey
LONDON, April 6 (Reuters) - Gold pared losses on Tuesday and
euro-priced gold rose to record highs as investors bought the
metal as an alternative to paper currencies amid persistent
fears over the health of peripheral euro zone economies.
This helped dollar-denominated gold shrug off a 0.75 percent
rise in the dollar's value versus the euro. []
Spot gold <XAU=> was bid at $1,127.55 at 1226 GMT against
$1,129.70 late in New York on Monday, when it rose as high as
$1,133.20 an ounce, its firmest since early March. Earlier it
touched a low of $1,122.50 an ounce.
Euro-priced gold <XAUEUR=R> meanwhile rose to a record
842.46 euros an ounce, against 837.68 late on Monday.
"With gold doing well on the crosses and with good physical
demand in India and China, there is still a group who are
looking at gold as a currency," said Simon Weeks, head of
precious metals at the Bank of Nova Scotia.
Indian dealers said demand for the metal in the world's
biggest gold market was firm as traders took advantage of a
price retreat to stock up ahead of a raft of festivals and for
the spring wedding season. []
Spot gold prices slipped in earlier trade as the dollar
firmed versus the euro, making the metal more expensive for
holders of other currencies.
The euro declined broadly, driven by concern over Greece's
persistent debt problems after a report that the country is set
to launch a multi-billion dollar bond in the United States this
month. []
The beleaguered Mediterranean nation also said it wants to
amend a recent EU aid deal, which highlighted Athens' ongoing
deficit problems. []
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange eased $5.50 to
$1,127.40 an ounce.
PALLADIUM HITS TWO-YEAR HIGH
Among other commodities, oil prices hit a fresh 18-month
high, having earlier declined as the dollar rallied. Gold tends
to track crude prices, as the metal can be bought as a hedge
against oil-led inflation. []
Palladium prices also rose to a new two-year high at $504 an
ounce, boosted by expectations demand will be strong this year
as buying by carmakers -- who account for more than half of
palladium consumption -- recovers and investment climbs.
Palladium <XPD=> was at $502 against $500, while platinum
<XPT=> was at $1,700 an ounce against $1,705.50, the 20-month
high it hit on Monday.
"We remain tactically bullish both metals this year,
expecting their price increases to outstrip those for gold,"
said UBS analyst Edel Tully in a note.
"Among the positive demand and supply factors we see this
year, our strongest conviction is for a rebound of auto-related
platinum group metal demand as worldwide vehicle production
rises, forcing a restocking of the metal inventories run down in
2009."
The gold-platinum, ratio which shows how many ounces of gold
are needed to buy an ounce of platinum, was at 1.51 on Tuesday,
Reuters data showed, matching the previous session's level, its
highest since September 2008.
Among other precious metal, silver <XAG=> at $17.96 an ounce
against $18.02. The world's largest silver ETF, the iShares
Silver Trust <SLV>, said its holdings fell 38.9 tonnes on April
5 to 9,178.27 tonnes. []
(Reporting by Jan Harvey; Editing by Keiron Henderson)
