* Euro debt problems a "wake up" call
* Physical gold dealers report rising demand for coins, bars
* Bullion extends record high in euro, pounds, Swiss francs
(Updates prices, adds comment)
By Pratima Desai and Jan Harvey
LONDON, May 12 (Reuters) - Gold surged to a record high on
Wednesday as investors sought safety from the risk of Greece's
debt crisis spreading to other countries, with demand for coins,
bars and bullion-backed exchange-traded funds all climbing.
Spot gold <XAU=> hit $1,244.45 an ounce, a gain of nearly 20
percent since early February. It was bid at $1,238.45 an ounce
at 1441 GMT from $1,232.05 late in New York on Tuesday. U.S.
gold futures <GCM0> hit a record $1,245.40 an ounce.
Investor buying this week was triggered by doubts that a $1
trillion rescue package to contain an escalating debt crisis in
Europe would be enough to cut the chances of sovereign default
in the euro zone. []
Gold priced in euros <XAUEUR=R> extended its record high to
982.51 euros an ounce on Wednesday, and has risen 28 percent
since early February, outstripping dollar gold's climb.
"The recent move in gold has been all about the gradually,
and then more rapidly escalating fiscal crisis in Europe," said
Nic Brown, an analyst at Natixis.
"Clearly, the largest move has taken place in euros. For me,
this is a classic illustration of gold being a store of value in
times of crisis. In particular, it is useful for investors in
the particular currency which is suffering the crisis."
Investors and many traders think the scale of Greece's
fiscal problems could make it tempting for the country to
default, despite the package, which could start a run on the
debt of countries such as Spain, Portugal and Italy.
Gold priced in sterling <XAUGBP=R> hit a record 835.49
pounds, and in Swiss francs <XAUCHF=R> a record 1,381.16 francs.
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For graphic showing gold priced in other currencies click:
http://graphics.thomsonreuters.com/10/GLD_CRRJH0510.gif
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INVESTMENT STRONG
The scale of investor buying can be seen in the holdings of
the world's largest gold-backed exchange-traded fund, the SPDR
Gold Trust <GLD>, which said its holdings stood at a record high
of 1,192.150 tonnes as of May 11.
Sales of smaller gold investment products like coins and
bars also jumped. The Austrian Mint, which produces the popular
Philharmonic gold coin, said it sold more gold in the two weeks
from April 26 than in the entire first quarter. []
Elsewhere Swiss refinery Argor-Heraeus said investor demand
for small gold bars and minted products had jumped tenfold since
the start of the year. []
"Our trading desk has seen a marked increase in demand -
especially for allocated gold and physical gold coins and bars.
Demand for silver coins and bars has risen as well," bullion
dealer Goldcore said in a note.
"The significant uncertainty in currency markets... is what
is driving demand and leading to higher prices."
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For a graphic showing the timeline of gold's rise to record
highs click:
http://graphics.thomsonreuters.com/10/GLD_TMLN.html
For a graphic showing the technical outlook for gold click:
http://graphics.thomsonreuters.com/gfx/WT_20101205115706.jpg
For graphic showing gold's moves against the dollar click:
http://graphics.thomsonreuters.com/gfx/LP__20101205110500.jpg
For graphic showing inflation-adjusted gold price click:
http://graphics.thomsonreuters.com/10/GLD_PRCINF0510.gif
For graphic showing 2010 commodity price performance
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
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Spot silver rose to $19.68 an ounce, its highest since March
2008. It was last at $19.57 from $19.28 late on Tuesday.
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its holdings rose to 9,115.15
tonnes as of May 11, up 27.43 tonnes from the previous business
day. []
Platinum <XPT=> was bid at $1,731.50 an ounce from $1,702
and palladium <XPD=> at $537.50 from $532 on Tuesday.
(Editing by Sue Thomas)
