* Gold prices rally to all-time highs above $1,250
* Bullion hit records in euros, sterling, Swiss francs
* Fitch: Britain facing formidable challenge to cut debt
* Coming up: U.S. May retail sales due on Friday
(Recasts, updates prices to market close, adds comments,
changes dateline, previous LONDON)
By Frank Tang
NEW YORK, June 8 (Reuters) - Gold hit an all-time high
above $1,250 an ounce on Tuesday as investors piled in due to
fears that European credit contagion could lead to a double-dip
recession.
The metal rose for a third straight session despite a lack
of compelling development related to euro zone's debt crisis,
but ended off its record peak reached earlier in the session.
Brian Hicks, co-manager of Global Resources Fund at U.S.
Global Investors, said significant gold demand was seen coming
from Europe and euro zone's problems also highlighted
structural credit issues elsewhere.
"Those concerns are driving investors who haven't
participated in gold before but are now desperately looking for
a hedge against the monetary instability."
"Investors are wondering where the next shoe is going to
drop," Hicks said.
On Tuesday, Fitch credit rating agency said Britain faced a
formidable challenge to cut government borrowing and Hungary,
which is also an EU member state that does not use the euro,
tried to reassure financial markets over its debt problems.
[]
Spot gold <XAU=> rose as high as $1,251.20 an ounce, and
was at $1,241.55 an ounce at 2:26 p.m. EDT (1826 GMT) against
$1,238.05 late on Monday.
U.S. gold futures for August delivery <GCQ0> settled up
$4.80 at $1,245.60 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.
"I think that gold is viewed as the safe kind of haven for
now, maybe a speculative place to be in, might not be a bad
place to be at least given the very challenging environment we
are in right now," said Maria Fiorini Ramirez, CEO of Maria
Fiorini Ramirez Inc, a consulting firm, at the Reuters
Investment Outlook Summit.
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.
The euro rose as investors booked profits a day after the
currency hit its lowest level against the dollar since early
2006, and the pound fell after a ratings agency urged Britain
to cut its deficit. []
However, analysts said spot gold could be topping as both
the technical reading on the price chart and the correlation
between gold and euro/dollar suggest a bearish reversal on the
gold price trend.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic showing gold's performance in different currencies:
http://link.reuters.com/pam88k
Graphic showing correlation between gold and euro:
http://link.reuters.com/nam88k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
INVESTMENT HOLDS FIRM
Investment interest in gold held firm, with holdings of the
world's largest gold exchange-traded fund, 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 jewelers slowed to a trickle as the monsoon progressed
in the world's largest consumer. []
Other precious metals remained largely unchanged, with
silver <XAG=> last at $18.30 an ounce against $18.09, platinum
<XPT=> at $1,520.50 an ounce versus $1,512, and palladium
<XPD=> at $438 versus $430.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCQ0> 1245.60 4.8 0.4 1096.20 13.6
US silver <SIN0> 18.477 0.315 1.7 16.845 9.7
US platinum <PLN0> 1528.80 11.50 0.8 1471.00 3.9
US palladium <PAU0> 442.15 11.80 2.7 408.85 8.1
Prices at 2:39 p.m. EDT (1839 GMT)
Gold <XAU=> 1235.25 -2.80 -0.2 1096.35 12.7
Silver <XAG=> 18.27 0.18 1.0 16.84 8.5
Platinum <XPT=> 1517.50 5.50 0.4 1465.50 3.5
Palladium <XPD=> 438.00 8.000 1.9 405.50 8.0
Gold Fix <XAUFIX=> 1246.00 -2.00 -0.2 1104 12.9
Silver Fix <XAGFIX=> 18.34 98.00 5.6 16.99 7.9
Platinum Fix <XAGFIX=> 1516.00 1.00 0.1 1466 3.4
Palladium Fix<XAGFIX=> 428.00 4.00 0.9 402 6.5
(Additional reporting by Jan Harvey in London and Barani
Krishnan in New York, Editing by Sofina Mirza-Reid)
