* Unrest in Egypt knocks stock markets, lifts gold from lows
* Dollar rises 0.5 pct versus the euro
* Largest silver ETF sees first inflow since Jan. 24
(Updates prices, adds comment)
By Jan Harvey
LONDON, Feb 11 (Reuters) - Gold recovered early losses on
Friday as stock markets came under pressure from disappointing
corporate news and unrest in Egypt, which heightened investors'
aversion to risk and balanced the impact of a stronger dollar.
Spot gold <XAU=> was bid at $1,362.74 an ounce at 1437 GMT,
against $1,362.90 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ1> rose $1.10 to $1,363.60.
Stock markets fell in Europe and the United States after
Egyptian President Hosni Mubarak said on Thursday he would not
immediately step down, after more than a fortnight of protests.
"There have been a number of factors that have emerged to
lend some support to the gold market," said Deutsche Bank
analyst Daniel Brebner. "Egypt has been instrumental in halting
the downward momentum that we had in January."
Gold fell 6 percent that month after a run of well-received
U.S. data shifted investors' focus onto assets seen as higher
risk, like stocks, but its slide has been arrested in February.
"There was a significant questioning with respect to gold,
whether there was really much further appreciation to be had,"
Brebner said. "There were potentially a number of big gold
investors questioning whether they should trim their positions."
"The reason why these positions are in place is because
there are some imbalances in the global economy."
"The reality is many of these investors realise it is going
to take some time (to correct these), and maybe gold remains a
good place to put part of your portfolio."
Turmoil in Egypt continued on Friday. The country's powerful
army gave guarantees that Mubarak's promised reforms would be
carried out, but protesters insisted he quit now and cranked up
the pressure by massing outside his palace. []
EURO RETREATS
Meanwhile the euro fell on a new bout of market jitters over
the euro zone's sovereign debt problems, as traders said the
European Central Bank stepped in to buy Portuguese bonds after
yields on its debt hit euro-era highs. [] []
Consequent dollar strength tends to weigh on gold as it
curbs the metal's appeal as an alternative asset and makes
dollar-priced commodities more expensive for holders of other
currencies, though the link has weakened in recent years.
Investment demand for gold remained soft, with holdings of
the world's largest gold-backed exchange-traded fund, New York's
SPDR Gold Trust <GLD>, easing by nearly a tonne on Thursday.
They are down just over 55 tonnes so far this year. []
In the same period of 2010, they fell around 27 tonnes.
"Consistent offloading by ETFs, who were pivotal in taking
the metal beyond $1,400, and lacklustre physical demand are the
key bearish forces curbing sustained gains," said Pradeep Unni,
senior analyst at Richcomm Global Services.
Premiums for gold bars were steady in Hong Kong and
Singapore, with no signs of buying interest from China after the
Lunar New Year celebration. There was hardly any physical buying
in Asia related to unrest in Egypt, dealers said. <GOLD/ASIA1>
Australia's Newcrest Mining <NCM.AX>, the world's third
largest gold miner after its takeover of Lihir Gold last year,
said higher metal output had helped almost double underlying
first-half profit. []
Silver <XAG=> was bid at $30.09 an ounce against $30.19.
Holdings in the world's largest silver ETF, the iShares
Silver Trust <SLV>, rose around 18 tonnes to 10,388.45 tonnes on
Thursday, their first increase since Jan. 24. []
Platinum <XPT=> was at $1,822.24 an ounce against $1,824.75,
while palladium <XPD=> was at $820 against $820.25.
(Reporting by Jan Harvey; editing by Keiron Henderson)
