* Euro, stocks, industrial commods fall
* SPDR gold ETF hits record, silver iShares ETF rises
* Gold in Swiss francs reaches record 1,352.74 francs/oz
(Releads, updates prices)
By Jan Harvey
LONDON, May 11 (Reuters) - Gold hit five-month highs on
Tuesday to within $10 of its December record peak as risk
aversion returned on doubts over smaller euro zone countries'
ability to cut their deficits despite a $1 trillion aid package.
The measures, unveiled on Monday, sparked a relief rally in
assets seen as higher risk, such as the euro, stocks and
industrial commodities. Gold slipped, but has recovered as the
rally in other assets lost steam. []
Spot gold <XAU=> hit a peak of $1,217.20 an ounce, its
highest since early December, and was bid at $1,216.76 an ounce
at 1107 GMT, against $1,201.90 late in New York on Monday.
"The euphoria we saw yesterday has almost ended. Gold has
remained well supported on safe-haven demand, and we think it
will drive further from here," said Commerzbank analyst Daniel
Briesemann.
"Market participants are still concerned about the financial
positions of a number of countries of the euro zone and their
debt problems, despite last weekend's aid package."
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the New York Mercantile Exchange rose $15.80 to
$1,216.50 an ounce.
Gold rallied last week on concern that Greece's debt
problems would be echoed elsewhere in the euro zone, but slid 2
percent on Monday after the rescue package sparked a relief
rally across financial markets.
That recovery fizzled out on Tuesday. The euro <EUR=> lost
0.8 percent against the dollar, European shares fell 2 percent
in early trade and oil prices slid below $76 a barrel. []
[] []
The dollar <.DXY> rose against a basket of currencies as
risk appetite waned. Usually this would weigh on gold, which can
be bought as an alternative to the U.S. currency, but the usual
strong link between the two has weakened in recent months.
"Gold has recently proven an ability to escape from its
traditionally negative correlation with the greenback as long as
bullish drivers emanate from its safe-haven status or its
perception as an asset of last resort, features it shares with
the U.S. currency," said Societe Generale in a note.
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INVESTMENT FIRM
Investment in gold held firm, with holdings of the world's
largest gold-backed exchange-traded fund, New York's SPDR Gold
Trust <GLD>, rising 3.652 tonnes to a record 1,192.150 tonnes on
Monday. []
Its holdings have risen 33.148 tonnes, worth some $1.275
billion at Monday's London afternoon fix price, in May so far.
But high prices weighed on Indian gold demand, dealers said,
after physical offtake saw a slight pick-up in the previous
session ahead of the key gold-buying festival of Akshaya Tritiya
on May 16, dealers said. []
Gold priced in Swiss francs <XAUCHF=R> hit a record high at
1,352.74 francs an ounce.
Platinum group metals declined in line with other industrial
commodities after Monday's bounce. Platinum <XPT=> was at
$1,677.50 an ounce against $1,693, while palladium <XPD=> was at
$514 against $529.
"Given the current pressure on commodities and reduction in
risk exposure, further consolidation can be expected
short-term," said TheBullionDesk.com analyst James Moore.
Silver <XAG=> was bid at $18.39 an ounce against $18.44.
Holdings of the largest silver ETF, the iShares Silver Trust,
rose 76.22 tonnes on Monday. []
(Editing by Sue Thomas)
