* Gold rises as concerns over euro zone, Korea linger
* SPDR gold ETF holdings rise for first time since early Dec
* Silver, PGMs rise in gold's wake
(Updates prices)
By Amanda Cooper
LONDON, Dec 20 (Reuters) - Gold rose on Monday, overcoming
weakness in the euro, after a warning from the European Central
Bank on the region's finances and Moody's claim that it may cut
the ratings of some Spanish banks boosted safe-haven flows.
Tensions on the Korean peninsula also fed the safe-haven bid
for gold after an artillery firing drill by the South Korean
military on a disputed island near the border with the North.
Spot gold <EAU=> was last up 0.5 percent at $1,379.59 an
ounce by 1447 GMT, having touched an intraday high of $1,388.05
earlier. U.S. gold futures for February <GCG1> rose 70 cents an
ounce to $1,379.90 an ounce.
The metal briefly slipped to a session low of $1,375.84 an
ounce as the euro extended losses after ratings agency Moody's
said it may cut some Spanish banks' ratings, but quickly
rebounded on demand for the metal as a haven from risk. []
"It looks to have caught a bit of a safe haven bid," said
Citigroup analyst David Thurtell. "But it's very quiet. Gold has
traded a very small range since an hour after the Asian open."
He said he expected the metal to remain in a relatively
narrow range into year-end. "Most funds have stopped for the
year and won't come back until the New Year," he said.
Gold, which has risen by over 25 percent so far this year,
is on track for a fourth successive month of gains.
Lending additional strength to the rise in the gold price
this month has been an increase in the inflows into
bullion-backed exchange-traded funds and an expansion in open
interest in U.S. futures.
"Being contrarian at this point in time is probably not
going to pay off," said Saxo Bank senior manager Ole Hansen.
"There seems to be an overwhelming belief that the market,
as it is now, is pointing higher, but we need to see the third
of January come first and see how it plays out."
Holdings of gold in the world's largest gold-backed ETF, the
SPDR Gold Trust <GLD>, rose for the first time since early
December, to 1,298.94 tonnes, reflecting investor demand for
bullion. []
UBS precious metals strategist Edel Tully said global ETF
holdings are now at a record 69.2 million ounces and pointed to
a pick-up in European coin demand late last week.
"It's been quite a while since ETF and coin demand both
increased at the same time: it occurred during the Greek crisis
in Q2, but hasn't over the past six months," she said.
"While one day of positive data does not suggest this tide
is turning, we'll be keeping a close watch on the underlining
appetite."
EURO SLIPS
On the currency markets, the euro slid versus the dollar and
hit an all-time low against the Swiss franc as investors looked
for more aggressive solutions from European leaders to the euro
zone's debt problems.
The single currency is looking vulnerable to more losses
against the dollar after breaching chart support on Friday after
the ECB expressed "serious concerns" that Ireland's bailout
package could affect the institution's liquidity operations in
the euro zone. []
Furthermore, with no real clarity emerging from a two-day
summit of EU leaders last week, the euro looked likely to
encounter more pressure. The dollar index <.DXY> was in positive
territory, helped in part by the crisis on the Korean peninsula.
Silver surrendered early gains to drop for the first session
in three, however. The spot price <XAG=> was last down 0.5
percent at $28.94 an ounce, though it has still risen by nearly
75 percent this year to its highest since early 1980.
iShares Silver Trust <SLV>, the world's largest
silver-backed ETF, said its holdings fell to 10,903.34 tonnes by
Dec 17 from a record 10,964.14 tonnes on Dec 14.
Platinum <XPT=> was last up 0.3 percent at $1,701.24 an
ounce, while palladium <XPD=> was up 0.3 percent at $738.97.
(Additional reporting by Jan Harvey; Editing by Sue Thomas)
