* Gold off initial highs as Wall St rally steals spotlight
* Gold in euros, sterling, Swiss franc hit record highs
* Skepticism on EU's Greece aid plan helped bullion early
* Coming up: US factory orders, pending home sales Tuesday
(Recasts, adds comments, updates prices to market close,
changes dateline, previously LONDON)
By Frank Tang
NEW YORK/LONDON, May 3 (Reuters) - Gold ended up on Monday
but an earlier rally to five-month high ran out of steam, and
the metal was underpinned by safe-haven demand as a record aid
plan for Greece failed to quell wider concerns on a euro-zone
debt crisis.
A Wall Street rally based on improved U.S. manufacturing
data has partially offset skepticism to the 110 billion-euro
($146 billion) EU/IMF bailout for Greece, which prompted
investors to switch funds into hard metals assets such as gold,
traders said. []
James Steel, chief commodities analyst at HSBC, said that
more uncertainties about debt-laden Greece and worries that the
crisis would spread to other euro members could support gold in
thin trade. "That has been the key factor behind gold's recent
strength," he added.
Analysts said that gold's underlying strength could be
shown by its defying the dollar's strength against the euro,
which fell to $1.32 due to doubts about Greece's ability to
implement budget cuts.
Spot gold <XAU=> rose to a 2010 high $1,187.41 an ounce,
also firmest since Dec. 4 earlier in the session. It was at
$1,183.30 at 2:36 p.m. EDT (1836 GMT), up from $1,177.25 late
in New York on Friday.
Gold's appeal as an alternative to paper currencies can be
seen as it hit record highs in euro <XAUEUR=R>, sterling
<XAUGBP=R> and Swiss franc <XAUCHF=R> terms.
European markets <> contained a dose of skepticism
and traded almost flat toward Greece's news, even as Wall
Street rose 1.5 percent on the manufacturing report, which also
boosted the dollar.
"The financial aid package is only buying time. The
long-term problems still exist. It also seems that market
players had expected a larger package," said Daniel Briesemann,
commodity analyst at Commerzbank. There had been talk of a 120
billion euro ($159.8 billion) package before the weekend.
GOLD UP 6 PCT IN APRIL
U.S. June gold futures <GCM0> also rose toward $1,190 an
ounce in earlier trade, and the contract settled $2.60 higher
at $1,183.30 an ounce. Silver <XAG=> took its lead from gold,
firming to $18.80 from $18.59 on Friday.
Trading activity remained fairly thin on Monday with
Britain, Japan, China and Thailand closed on Monday for public
holidays.
Gold gained almost 6 percent in April, its biggest
one-month rise since November, as the credit ratings downgrades
of Greece, Spain and Portugal unleashed a wave of risk
aversion, channeling money into gold.
On technical charts, gold is on a bullish trend toward
$1,261 per ounce.[] Earlier in the session, prices
were less than $50 away from record highs hit late last year at
$1,226.10.
In other precious metals, platinum <XPT=> slipped to
$1,724.00 from $1,739.50 quoted late on Friday in New York,
while palladium <XPD=> also fell to $544.50 an ounce from
$551.50.
PGM prices stayed lower due to industrial metals' weakness,
even as U.S. auto sales rose in April from recession-stunted
results a year earlier, supported in part by incentives, led by
Ford Motor Co <F.N> and Hyundai Motor Co <005380.KS>.
[]
The platinum group metals, used mainly to clean auto
emissions, have benefited from expectations for auto sales to
motor out of crisis mode this year.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1183.30 2.6 0.2 1096.20 7.9
US silver <SIK0> 18.813 0.202 1.1 16.845 11.7
US platinum <PLN0> 1728.90 -16.20 -0.9 1471.00 17.5
US palladium <PAM0> 548.25 -7.50 -1.3 408.85 34.1
Prices at 2:40 p.m. EDT (1840 GMT)
Gold <XAU=> 1182.70 5.45 0.5 1096.35 7.9
Silver <XAG=> 18.80 0.21 1.1 16.84 11.6
Platinum <XPT=> 1724.00 -15.50 -0.9 1465.50 17.6
Palladium <XPD=> 544.50 -7.000 -1.3 405.50 34.3
(Additional Reporting by Veronica Brown in London and James
Regan in Sydney; Editing by Lisa Shumaker)
