* Euro slips ahead of ECB meeting; press conference eyed
* Portugal seeks EU bailout, lifting European shares
* Coming up: ECB interest rate decision, 1145 GMT
(Updates prices)
By Jan Harvey
LONDON, April 7 (Reuters) - Gold held near $1,460 an ounce
in Europe on Thursday, just below the previous session's record
high, ahead of a hotly anticipated interest rates decision from
the European Central Bank.
The precious metal is being supported by concerns over euro
zone debt, ongoing violence in the Middle East and North Africa
and soaring oil prices, but moves are expected to be muted ahead
of the ECB decision at 1145 GMT and accompanying statement.
Spot gold <XAU=> was bid at $1,458.60 an ounce at 1120 GMT,
against $1,457 late in New York on Wednesday. U.S. gold futures
for June delivery <GCv1> rose $1.40 an ounce to $1,459.90.
Spot prices rallied to a record $1,461.90 an ounce on
Wednesday, boosted by a retreat in the dollar ahead of the ECB
meeting, but has struggled to maintain traction above $1,460.
"Gold is in consolidation mode pre-ECB decision," said
Bayram Dincer, an analyst at LGT Capital Management.
"Of more importance will be the press conference. Will this
be one of a series of interest rate hikes, or will it be a
one-time effect? The ECB press conference will determine the
next direction of gold."
The bank is expected to raise benchmark interest rates on
Thursday by 25 basis points, its first increase since July 2008,
and could signal more hikes are on the cards despite Portugal's
request for a European bailout. []
The euro <EUR=> see-sawed ahead of the decision, which has
already been heavily priced in.
The impact of a rate rise on gold is as yet unclear. Higher
rates are generally negative for gold as a non-yielding asset,
but they may support the metal if they weigh on the dollar.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphics on the ECB and interest rates:
http://r.reuters.com/kah88r
For graphics on the euro zone debt struggle:
http://r.reuters.com/hyb65p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
GOLD ETF HOLDINGS SLIP
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, slipped more than 7
tonnes on Wednesday to their lowest since May 2010, their
biggest one-day drop in more than two weeks. []
Interest in ETFs, which issue securities backed by physical
metal, has been muted since the start of the year, with the SPDR
recording its biggest ever quarterly outflow in the first three
months of 2011.
"Other factors have to be used to explain the rally of gold
prices, and there are plenty of them; besides the weak U.S.
dollar, the debt crisis in the euro zone peripherals is also
clearly playing a role," said Commerzbank in a note.
"Portugal bowed to pressure yesterday evening and not
unexpectedly requested financial aid from the EU rescue fund.
The country is set to receive around 80 billion euros as soon as
possible."
European shares rose on Monday on hopes that Portugal's
decision to seek financial aid could put a brake on the region's
debt crisis, although analysts remain concerned about other euro
zone countries, including Ireland and Spain. []
Among other commodities, oil prices held near multi-year
highs, as unrest in the key oil-producing Middle East and North
Africa region fuelled fears of supply outages. []
Among other precious metals, silver <XAG=> was bid at $39.45
an ounce against $39.43, just off the previous session's 31-year
high at $39.75. Platinum <XPT=> was at $1,785.99 an ounce versus
$1,787.45, while palladium <XPD=> was at $781.72 versus $778.10.
(Editing by Alison Birrane)
