* Gold briefly rises to $1,251; euro, Nikkei slip
* Coming Up: U.S. employment index for August; 1400 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Sept 7 (Reuters) - Gold edged down on Tuesday as
early buying subsided and the euro slipped against the U.S.
dollar, but volatile stock markets could encourage some
investors to shift to bullion.
Gold could challenge its lifetime high of around $1,264 an
ounce touched in June as the outlook for the global economy
remained murky and demand from jewellers steady during the
festive season in main consumer India, said dealers.
Spot gold <XAU=> eased 20 cents to $1,249.35 an ounce by
0525 GMT, having hit an intraday high of $1,251 on light
physical buying. U.S. gold futures for December delivery <GCZ0>
were unchanged at $1,251.1 an ounce.
"Even though there's some liquidation in the ETF, everybody
is still bullish. There's so much uncertainty in the economy,"
said Ronald Leung, director of Lee Cheong Gold Dealers in Hong
Kong.
"The festive season is on and we expect to see buying at
the lower end. I think the next target is the all-time high."
Demand in India rises during the festive season, which
begins with Raksha Bandhan in August and lasts through November
with Dhanteras -- the single-biggest gold buying day. []
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust, said its holdings slipped to 1,294.442 tonnes by
Sept 3 from 1,294.908 tonnes on Sept 2. The holdings surged to
a record 1,320.436 tonnes on June 29. []
Silver <XAG=> was barely changed at $19.83 an ounce after
rising as high as $19.92 on Monday, matching a peak seen on
Friday -- the metal's highest level since March 2008.
Some physical dealers said the recent gains were driven by
speculators, who took advantage of silver's cheap price
compared to other precious metals, and not by purchases from
the industrial sector.
The Nikkei slipped on Tuesday, hit by profit-taking after
four straight days of large gains. Investors are keen to see
how Wall Street reacts to U.S. President Barack Obama's
infrastructure plan proposal.
Scrambling to spur job creation, Obama proposed a six-year
plan to rebuild U.S. infrastructure with an initial $50 billion
investment and prepared new business tax cuts. []
The euro slid from a three-week peak against the dollar hit
the previous day, as rekindled worries about the European
banking sector prompted investors to cut risks. []
Fears that the euro debt crisis would spread and the U.S.
economy was slowing sent gold to a record high in June.
In Shanghai gold futures, the most active December contract
<SHAUZ0> was barely moved at 272.87 yuan ($40.2) a gram.
Precious metals prices at 0525 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1249.35 -0.20 -0.02 14.02
Spot Silver 19.84 -0.06 -0.30 17.88
Spot Platinum 1559.10 3.80 +0.24 6.28
Spot Palladium 524.25 0.42 +0.08 29.28
TOCOM Gold 3389.00 -8.00 -0.24 3.99
17977
TOCOM Platinum 4255.00 -17.00 -0.40 -2.88
9132
TOCOM Silver 53.90 -0.30 -0.55 4.26
181
TOCOM Palladium 1426.00 -19.00 -1.31 22.40
183
Euro/Dollar 1.2797
Dollar/Yen 84.12
TOCOM prices in yen per gram. Spot prices in $ per ounce.
($1=6.78 yuan)
(Editing by Michael Urquhart)
