* Euro zone debt, U.S. economy in focus
* Markets monitor EU leaders' summit in Brussels
* Safe-haven bid reignited by downbeat U.S. data
* Coming up: UK public finances, 0830 GMT on Friday
(Updates prices)
By Amanda Cooper
LONDON, June 17 (Reuters) - Gold was set for its largest
daily rise in a week on Thursday, as a combination of concern
over the impact of the euro zone debt crisis and downbeat U.S.
data encouraged a fresh sweep into safe-haven assets.
European ministers jointly backed the publication of
so-called bank "stress tests", which drove the euro to
three-week highs, along with a successful Spanish bond auction.
Spot gold <XAU=> was bid at $1,246.75 an ounce at 1425 GMT,
against $1,229.60 late in New York on Wednesday. U.S. gold
futures for August delivery <GCQ0> rose $14.50 to $1,245.10.
"It's the age-old story, that however illogical it seems,
gold is looking for any and every opportunity to go higher, and
we all know the reasons why, the safe-haven factor, sovereign
debt risks and so on," said Peter Hillyard, head of metals sales
at ANZ Investment Bank.
"The mood is with gold right now, the momentum is with gold
and the market will either do nothing or go up," he said.
U.S. data that showed consumer prices posted their largest
fall in nearly 1-1/2 years in May and a surprise rise in weekly
unemployment claims increased the chances of the Federal Reserve
maintaining its policy of ultra-low interest rates as the
economy struggles to shake off the vestiges of recession.
Another report showing a surprise drop in Mid-Atlantic
business activity knocked equities into negative territory and
pushed crude oil below $78 a barrel <CLc1>.[]
NEAR RECORD
Gold has risen as much as 14 percent since the start of the
year, spiking to a record high at $1,251.20 an ounce last week
fuelled by the belief that Europe's sovereign debt issues could
severely undermine the euro.
"Many people missed it to buy, as it was moving up too
fast," Commerzbank senior trader Michael Kempinski said.
"Physical demand slowed down, but people are buying the dip. I'm
quite optimistic for gold, especially gold in euros."
Gold in euros <XAUEUR=R> is trading around 1,008.70 an
ounce, about 4 percent below last week's record high of 1,050.86
euros.
Kempinski said investors were buying gold as an alternative
to all paper currencies.
The concern investors have about some debt-laden euro zone
economies, such as Spain, has not receded.
The premium bond holders demand to own 10-year Spanish
government debt over benchmark German bunds hit a euro lifetime
high on Thursday, although an auction of Spanish 10-year bonds
attracted good demand. []
The euro <EUR=> trimmed some of its gains versus the dollar
but still traded up on the day after the Spanish auction soothed
some fears about the country's public finances. []
Industrial commodities weakened, with copper and aluminium
sliding between 2.5 and 3 percent as the data out of the United
States cast doubt on the pace of demand growth.
The U.S. government said its monthly consumer price index
fell 0.2 percent last month, the largest decline since December
2008, after dipping 0.1 percent in April, while a reading of
weekly initial jobless data showed claims rose by more than
expected to 472,000 last week. []
At a summit of EU ministers in Brussels, Germany joined
France and Spain in calling for the publication of bank stress
tests and leaders sought to play down Spain's problems and said
the country was not on the agenda. []
Interest in physical gold as an investment product kept
holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, at a record above 1,306
tonnes on Wednesday.
Silver <XAG=> was bid at $18.82 an ounce against $18.40,
while platinum <XPT=> was at $1,565.40 an ounce versus $1,566.50
and palladium <XPD=> was at $475.00 against $471.
(Additional reporting by Jan Harvey; editing by Keiron
Henderson)
