* Gold prices rally to all-time highs in London, New York
* Prices also hit records in euros, sterling, Swiss francs
* Euro, equities give up early gains to turn lower
(Updates prices)
By Jan Harvey
LONDON, June 8 (Reuters) - Gold hit a record dollar high
above $1,250 an ounce on Tuesday and new peaks in other
currencies as concern over Europe's economic outlook lifted risk
aversion, knocking stock markets lower for a third session.
Fears grew over prospects for a European economic recovery
after ratings agency Fitch warned the UK faced a "formidable"
challenge in plans to cut government borrowing. []
Spot gold <XAU=> rose as high as $1,251.20 an ounce, and was
at $1,246.80 an ounce at 1515 GMT against $1,238.05 late on
Monday. U.S. gold futures for August delivery <GCQ0> hit a
record $1,254.50 and was later up $8.40 at $1,249.20 an ounce.
The precious metal, up around 12 percent so far in the
latest quarter, is benefiting from fears the euro zone's
sovereign debt crisis may spread, weighing on global economic
recovery, analysts said.
"The sovereign debt issue is a perfect thing for gold as a
safe haven," said VM Group analyst Matthew Turner.
"It makes investors nervous about the safety of other
assets, and raises the chance of both devaluation in some of
these countries and inflation across not only the euro zone but
the whole world."
Euro-priced gold <XAUEUR=R> also hit a record 1,050.86 euros
an ounce, while gold priced in sterling <XAUGBP=R> and Swiss
francs <XAUCHF=R> hit all-time highs of 870.63 pounds an ounce
and 1,450.40 francs an ounce respectively.
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The euro <EUR=> edged up after tumbling to a four-year low
versus the dollar on Tuesday, but gains were slight as the
market remained anxious about debt levels in several euro zone
countries. []
Euro zone sovereign debt worries resurfaced this week after
Hungary warned about its deficit last Friday.
European shares fell, extending a sell-off into a third
session amid heightened concerns over sovereign debt after Fitch
Ratings said the UK is facing a "formidable" fiscal challenge,
while Wall Street was flat in choppy trade. [] []
With the fear factor still dominating the financial markets,
gold is set for further gains, analysts said. "Right now it's
too difficult to stand in front of a moving train," said UBS
analyst Edel Tully in a note.
INVESTMENT FIRM
Investment interest in gold held firm, with holdings of the
world's largest gold exchange-traded fund, New York's SPDR Gold
Trust <GLD>, unchanged on Monday, but high prices weighed on
physical demand in the world's top gold consumer, India.
Premiums for gold bars slipped in Asia on Tuesday after
bullion raced towards a lifetime high, while purchases from
Indian jewellers slowed to a trickle as the monsoon progressed
in the world's largest consumer. []
From a technical perspective, gold's break higher on Monday
has left it well positioned to make new highs, according to
analysts who study charts of past price movements to determine
the future direction of trade.
"In dollar terms, $1,250 may prove to be near-term
resistance, but we ultimately target a run toward long-term
channel resistance at $1,374," said Barclays Capital technical
analysts in a note.
"In euro terms, we target $1,118 following the break of
$1,013 range highs."
Silver <XAG=> was bid at $18.36 an ounce against $18.09,
platinum <XPT=> at $1,523 an ounce versus $1,512, and palladium
<XPD=> at $437.95 versus $430.
(Editing by Keiron Henderson)
