* Equities rally in Europe, Asia after corporate earnings
* Oil, base metals climb as risk appetite improves
* Coming up: Fed chair Bernanke's testimony before Congress
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, July 21 (Reuters) - Gold held near $1,190 an ounce in Europe on Wednesday as a brief rally in the metal ran out of steam after well-received U.S. corporate earnings reports boosted appetite for assets seen as higher risk, like equities.
A 6.1-tonne fall in holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, on Tuesday, their biggest one-day decline since December, indicates waning investment demand for the metal, analysts said.
Spot gold <XAU=> was bid at $1,190.55 an ounce at 0931 GMT, against $1,191.40 late in New York on Tuesday. U.S. gold futures for August delivery <GCQ0> eased $1.40 an ounce to $1,190.30.
"It looks like from the investors' side, gold is not the favourite it was until a few weeks ago," said Commerzbank analyst Daniel Briesemann. "If financial investors take more money out of the market... quite quickly, we might see gold dropping to $1,150 and below."
A seasonal recovery in gold demand in the fourth quarter is still likely to take prices back to $1,250 an ounce towards the end of the year, however, he added.
World stocks rose on Wednesday while government bonds slipped after strong earnings and forecasts from tech heavyweight Apple raised expectations for solid second-quarter results from other major companies. []
European shares surged in early trade, while the euro hovered near a ten-week high against the dollar. [] []
Among other commodities, oil rose towards $78 a barrel and base metals like copper strengthened after strong U.S. corporate earnings raised optimism over the strength of the recovery in the world's largest economy. [] []
Looking ahead, the financial markets are awaiting Federal Reserve Chairman Ben Bernanke's testimony on economic and monetary policy before Congress later today.
Analysts will be watching for any suggestion that the Fed may extend its programme of quantitative easing.
STEADY SLIP
Gold has fallen steadily since reaching a record $1,264.90 an ounce at the end of June, boosted by investment in the metal as a haven from volatility in other markets amid concerns over the economic outlook and euro zone sovereign debt levels.
U.S. economist Nouriel Roubini said in a note on Wednesday that gold's near ten-year rally may be running out of steam.
"The concerns propelling the price of gold specifically are very real and should not be ignored," he said. "But is now the time for investors to jump the gold bandwagon? We wouldn't encourage it."
"In short, our core economic forecast scenario does not entail any of the extreme events that could result in a major gold price spike, and given the fact that the metal has already surged in price, we see several potential downside risks."
Prospects for the asset price bubble bursting, interest rates starting to rise, or investors losing confidence in gold's value could all knock the metal lower, he said.
Among other precious metals, silver <XAG=> was at $17.71 an ounce versus $17.65, platinum <XPT=> at $1,508.20 against $1,512.95 and palladium <XPD=> at $446.40 versus $449.53.
Refiner Johnson Matthey reported a 47 percent rise in first-quarter profit as it recovered from a slump in demand, and forecast an improved full-year performance.
The platinum refiner and world's largest supplier of catalytic converters said on Wednesday April-June sales excluding precious metals rose 32 percent year on year. Falling demand for automotive products hit the group last year as the recession took its toll on sales.
(Reporting by Jan Harvey; Editing by Alison Birrane)
