* Risk aversion flares as Moody's puts Portugal on review
* Euro hangs onto gains, European shares higher
* Chinese platinum imports spike in November
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Dec 21 (Reuters) - Gold prices rose towards $1,390
an ounce in Europe on Tuesday, supported by fresh strength in
the euro and buoyant interest in the metal as a haven from risk
amid fears of further borrowing strains in the euro zone.
Tensions ran high after ratings agency Moody's said it had
put Portugal on review for a possible downgrade. This pulled
gold from highs as it brought the euro under some pressure,
though the single currency remained higher on the day. []
Spot gold <XAU=> was bid at $1,386.22 an ounce at 1026 GMT,
against $1,384.90 late in New York on Monday. U.S. gold futures
for February delivery <GCG1> rose $1.00 an ounce to $1,387.10.
"We are still in narrow trading but euro zone fears are
creeping back into the investor agenda," said Andrey
Kryuchenkov, an analyst at VTB Capital. "The latest surge in
ETFs and some risk aversion have been supportive lately."
"The downside is definitely limited with the euro zone back
in focus, though I think the wider range will hold until next
year, with book squaring all but over before year-end."
The euro pared early gains against the dollar and German
Bund futures trimmed losses after Moody's said it had put
Portugal's A1/P-1 ratings on review for possible downgrade,
pressuring appetite for risk in the euro zone. []
The move comes after Moody's downgraded Irish debt on Friday
and said on Monday it may cut the ratings on Spanish banks.
[]
Gold has risen 26 percent so far this year, driven largely
by concerns over euro zone debt levels, which have allowed the
metal to ride out hefty losses in the euro this year. Relative
dollar strength would usually be a negative factor for gold.
"Recent strength in the dollar and gold has been tied to
increasing concerns over the health of the euro, especially
after the ECB voiced concern yesterday over Ireland's newly
passed debt restructuring law," MF Global said in a note.
"These factors as well as others have the potential of
pushing prices higher through early 2011," it added.
ETF DEMAND FIRM
Investor demand for gold has been firmer this month, with
holdings of the world's largest gold exchange-traded fund, the
SPDR Gold Trust <GLD>, rising by just over 12 tonnes since the
end of November. []
Jewellery consumption by major buyers in India and elsewhere
in Asia was soft, however. "People are waiting for Christmas and
New Year," said one dealer in Singapore. "Towards the year-end,
there are not many orders from jewellers."
Among other precious metals, silver <XAG=> was bid at $29.31
an ounce against $29.33. Platinum <XPT=> was at $1,711.25 an
ounce versus $1,692 and palladium <XPD=> at $746.48 versus $740.
Switzerland, one of the leading clearers of platinum group
metals in Europe, imported 3,772 kg of platinum and 1,765 kg of
palladium in November, data from the Swiss Federal Customs
office showed on Tuesday. []
China also released precious metals trade data on Tuesday.
[]
"China November trade statistics released this morning show
a sizeable spike in platinum imports," said UBS in a note. "The
origin of the metal is not entirely clear. The usual suspects -
South Africa, Japan, Switzerland and Russia - are cited, but
3.25 tonnes of the total came from 'country or region unknown'."
"The lack of country origin, something we haven't seen in
the data before, could mean that the metal is non-good
deliverable, but the country or region of origin reflects where
the metal has been shipped in from rather than where the metal
was originally refined."
"These anamolies make it hard to take these figures at face
value," it said.
(Reporting by Jan Harvey; Editing by Alison Birrane)
