* Euro under pressure after Bernanke spooks currency market
* Stocks, commodities bounce back after losses
* SPDR ETF holdings rose more than 30 T to record
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, May 26 (Reuters) - Gold prices rose back towards
$1,210 an ounce in Europe on Wednesday as ongoing volatility in
the currency markets and fears over the outlook for the euro
prompted buying of gold as a haven from risk.
Interest in physical gold remained high, with holdings of
the world's largest gold-backed exchange-traded fund, New York's
SPDR Gold Trust <GLD>, rising more than 30 tonnes on Tuesday to
a record high 1,267.322 tonnes.
Spot gold <XAU=> was bid at $1,209.35 an ounce at 0855 GMT,
against $1,200.10 late in New York on Tuesday.U.S. gold futures
for June delivery <GCM0> on the COMEX division of the New York
Mercantile Exchange rose $11.70 to $1,209.70 an ounce.
Prices are recovering after falling 4.5 percent last week as
concern over the euro zone's sovereign debt crisis sparked
selling of assets seen as higher risk, like stocks and
commodities.
"Same old story for gold -- initially lower on commodity
liquidation as people need cash, and then up on (the view of)
gold as a currency investment," said Simon Weeks, head of
precious metals at the Bank of Nova Scotia.
"With strong ETF demand and the man on the street buying
gold coins in Northern Europe, it's not surprising that we are
now higher."
Geopolitical concerns centred on the Korean peninisula,
where tensions are rumbling, were also cited by some analysts as
an additional supporting factor for gold. []
"At the moment, not only financial jitters but also
geopolitical concerns over what could be happening in Korea are
also (helping gold)," said Commerzbank analyst Eugen Weinberg.
The euro <EUR=> fell towards a four-year low versus the
dollar after Federal Reserve chair Ben Bernanke highlighted the
possibility that its dollar funding facility would not last
forever, lifting risk aversion.
Speaking in Tokyo, Bernanke said dollar swap lines, which
were reinstated as the Greek debt crisis escalated, played an
important role in stabilising markets, but that the Fed did not
want to provide a permanent service. []
COMMODS, EQUITIES REBOUND
Commodity and equity markets rose, however, rebounding from
previous losses. European equities bounced back from nine-month
lows hit a day earlier, with investors returning to the market
to buy beaten-down stocks. [] []
Elsewhere oil climbed back above $70 a barrel after a report
showing a drop in U.S. gasoline stockpiles, while industrial
metals like copper, aluminium and zinc climbed. [] []
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For a graphic showing the price performance of various
commodities this year, click on:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
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Gold is also picking up momentum as ETFs continue to buy
bullion. The 108-tonne inflow into the SPDR fund this month
alone is worth some $4.179 billion.
"The amount of physical gold held by the world's largest ETF
provider to back its exchange traded products gained almost 7
percent since the very end of April, with the euro zone debt
crisis quickly unfolding," said VTB Capital analyst Andrey
Kryuchenkov in a note.
"It is an astonishing number, with an already long market
adding record amounts with investors seeking to protect
themselves against currency and sovereign default risks."
Among other precious metals, platinum <XPT=> was at $1,529
an ounce against $1,515.50, while palladium <XPD=> was at $448
against $436. Spot silver <XAG=> was bid at $18.21 an ounce
against $17.86.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
