* Gold firms as Goldman results fuel risk aversion
* Euro off two month highs, world stocks slip
(Recasts, adds comment, updates prices)
By Jan Harvey and Maytaal Angel
LONDON, July 20 (Reuters) - Gold rose more than 1 percent to
top $1,190 an ounce on Tuesday on buying of the precious metal
as a haven from volatility in other markets, as investors
awaited Friday's outcome of stress tests on European banks.
Fresh interest from physical buyers after the precious
metal slipped to a two-month low in earlier trade also helped
lift prices, analysts said.
Spot gold <XAU=> was bid at $1,190.95 an ounce at 1541 GMT
against $1,180.35 late in New York on Monday, having earlier
slipped as low as $1,175.35. U.S. gold futures for August
delivery <GCQ0> rose $8.10 an ounce to $1,190.00.
On the currency markets, the euro fell from a more than
two-month high against the U.S. dollar as tumbling equity prices
hit appetite for risk. []
"Where there is uncertainty in the market, gold and precious
metals seem to benefit the most," said Jeff Pritchard, a broker
at Altavest Worldwide Trading in California.
"(If) we see really good results from the stress tests, gold
will take the biggest hit, but if there is more uncertainty and
it creates more foreseeable problems, we could see an extension
to this rally in gold."
Wall Street stocks fell on Tuesday after disappointing
corporate results and as housing data gave more evidence of a
slowing economy. Goldman Sachs <GS.N> lost 1.3 percent after
posting lower second-quarter earnings and revenue. []
European shares also slipped 0.9 percent after gaining in
earlier trade. []
Goldman Sachs said second-quarter earnings fell to 78 cents
a share compared to $4.93 a year earlier, undershooting
expectations and a "pretty significant slowdown in their overall
business", according to one market watcher. []
DOLLAR FIRMS
The dollar meanwhile firmed 0.2 percent against a basket of
currencies. Historically a stronger dollar has been negative for
gold, as it curbs gold's appeal as an alternative asset and
makes dollar-priced commodities pricier for other currency
holders.
That inverse relationship has reversed since the start of
the year as both benefited from risk aversion. "Gold retains its
positive correlation to the dollar, although... this
relationship continues to soften," said UBS analyst Edel Tully.
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For a graphic showing gold's correlation with the euro and
dollar, click on:
http://graphics.thomsonreuters.com/gfx1/SBrb_20102007103702.jpg
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Other commodities also rose, with oil reversing earlier
losses as prices found some support from expectations of lower
crude inventories. Base metals were mainly stronger, with copper
rising as inventories slipped. []
Some physical demand came through for gold after its slip
below $1,180 an ounce earlier. Premiums for gold bars
strengthened on Tuesday after a drop in bullion prices triggered
buying from jewellers across Asia, with demand especially firm
from India and Indonesia. []
Among other precious metals, silver <XAG=> was at $17.65 an
ounce against $17.51. Platinum <XPT=> was at $1,505 an ounce
against $1,509, and palladium <XPD=> at $445 against $441.45.
The world's fourth largest primary platinum producer,
Aquarius Platinum <AQP.L>, said it did not expect output to be
lost as a result of a mine-by-mine safety review in South Africa
of its two largest operations. []
South Africa last week issued a directive restricting how
much ore can be extracted by some mechanised mining techniques
in the northwest of the country after an accident killed five
miners at an Aquarius-operated mine this month. []
(Editing by Keiron Henderson)
