* SPDR ETF overtakes SNB as world's 6th largest gold holder
* Gold seen heading to $930/940 resistance level
* Currency devaluation fears seen boosting gold
(Updates throughout, previous TOKYO)
By Paul Lauener
LONDON, March 13 (Reuters) - Gold dipped in Europe on Friday
as stronger equities decreased gold's appeal as a safe haven,
but interest in exchange-traded funds and fears of currency
devaluation are likely to push the precious metal higher.
Spot gold <XAU=> fell to $921.20/922.20 an ounce at 1056 GMT
from $926.65 late in New York on Thursday.
World stocks were on track on Friday for one of their
largest weekly gains in 20 years, propelled by growing
confidence in the recovery of the U.S. banking system.
[]. Firmer equities divert interest from gold as a
safe-haven asset.
"Traders are looking at the equity markets as a cue,"
Calyon metals analyst Robin Bhar said.
But Bhar said Thursday's announcement that the Swiss
National Bank had moved to devalue its currency to boost the
economy and news of new inflows into ETFs had fuelled interest
in the precious metal.
"Those two pieces of information should allow gold to at
least consolidate and maybe now test the resistance around
$930/$940," he said.
The precious metal rallied on Thursday after the SNB sold
Swiss francs against the euro, raising the spectre of a race to
devalue major currencies. []
If other central banks follow the SNB's lead, paper
currencies could suffer, boosting the appeal of gold as an
alternative asset.
"This news could be interpreted as the beginning of a
'devaluation race' in which the stable alternative currency,
gold, is likely to profit most," Commerzbank said in a note.
Interest in gold has also been boosted by news that
holdings of the largest gold ETF, New York's SPDR Gold Trust,
rose 3.36 tonnes on Thursday to a record 1,041.53 tonnes,
overtaking the SNB as the world's sixth-largest holder of gold.
Buying of physical gold to back ETFs has represented a major
tranche of demand in recent months, with a sharp rise in ETF
holdings at the beginning of the year a key factor in gold's
price rally.
HEDGE
On the currency markets, the dollar weakened to a 2-1/2 week
low against the euro.
Although gold and the dollar are currently moving in the
same direction as both react to risk aversion, a weaker dollar
usually boosts gold, which is bought as a hedge against weakness
in the U.S. currency.
If the dollar continued to weaken, it was likely to provide
gold extra support in the medium term, Bhar said.
Elsewhere, China's central bank said in its annual
international financial markets report that gold could be set to
climb to record highs in the context of the financial crisis.
[]
Among other precious metals, spot silver <XAG=> was steady
at $12.98/13.05 an ounce, from its Thursday finish of $12.94.
Spot platinum <XPT=> was $1,049/1,054 an ounce, from its
previous close of $1,049.50, while spot palladium <XPD=> was a
touch firmer at $198/202 an ounce, up from its late Thursday New
York quote of $195.
Both metals, which have mainly industrial uses, have
suffered from the economic slowdown, and especially a fall in
demand for cars.
"While the global economic outlook continues to
deteriorate... we believe there are risks in owning platinum at
the moment," UBS strategist John Reade said in a note.
(Reporting by Paul Lauener; additional reporting by Jan Harvey;
editing by Sue Thomas)
