* Gold holds near $1,190 as rising stocks limit investment
* Euro swings higher ahead of bank stress test results
* SAfrican mining directive eyed for impact on platinum
(Updates, adds comment, changes dateline from SYDNEY)
By Jan Harvey
LONDON, July 19 (Reuters) - Gold was little changed near
$1,190 an ounce in Europe on Monday, consolidating after last
week's 1.5 percent correction, as investment demand for the
precious metal dried up and appetite for other assets improved.
Spot gold <XAU=> was bid at $1,192.45 an ounce at 0912 GMT,
against $1,193.10 late in New York on Friday. U.S. gold futures
for August delivery <GCQ0> rose $2.80 an ounce to $1,191.00.
"We are pivoting around $1,200 still, $15 either side," said
Saxo Bank analyst Ole Hansen. "Some of the risk premium that has
gone into gold, primarily from the banking worries we have had,
has been all but silenced for now, so that is removing a bit of
the support we have had previously."
"Liquidity is pretty poor, so it doesn't take much to move
this market," he added.
An improved appetite for assets seen as higher risk, like
equities and industrial commodities, has taken some of the wind
out of gold's sails in recent weeks.
European stocks pared losses made on the back of a Moody's
downgrade of Ireland to turn higher in early Monday trade, while
copper prices rose and oil steadied after early losses. []
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Gold has struggled to hold its ground since hitting a record
$1,294.90 an ounce in late June on the back of concerns over
euro zone sovereign debt, which boosted interest in the metal as
a hedge against currency volatility, as those fears retreated.
In an indication of how far that factor has receded, the news
that rating agency Moody's had downgraded Ireland's sovereign
bond ratings was largely ignored by the gold market.
"It is not that the problems in Europe have gone away... but
the theme right now is the United States, the weaker data we had
from there last week and the subsequent move in the dollar,"
said Hansen.
"The fact that gold is not finding support from the weaker
dollar is a bit of a concern." Nonetheless, as long as holdings
of precious metals exchange-traded funds remain firm, gold
should remain supported, he added.
EURO FIRMS
Holdings of the world's largest gold exchange-traded fund,
New York's SPDR Gold Trust <GLD>, held at 1,314.211 tonnes on
Friday. They have slipped more than 6 tonnes in July so far, but
are still up more than 180 tonnes since the start of the year.
The euro firmed in early trade, meanwhile shrugging off
early losses made after the Ireland downgrade, as traders
awaited results of bank stress tests. []
Among other precious metals, platinum <XPT=> was at
$1,506.70 an ounce against $1,509, while palladium <XPD=> was at
$452.28 against $446.78.
Aquarius Platinum, the world's fourth-largest primary
platinum producer, said it will appeal against a directive
introduced by the principal inspector of the North West region
of South Africa on bord and pillar mining. []
In bord and pillar mining, miners extract material from
corridors, or bords, leaving material between the bords as
pillars holding up the roof.
The directive wants all mechanised bord and pillar mines in
the region to reduce the width of the bord to six metres from 10
metres. Aquarius said it does not believe the directive will
result in fewer accidents.
"As the details become clearer and in turn the production
implications, this development has the ability to inject a South
African premium into the platinum price," said UBS analyst Edel
Tully in a note.
"Platinum's reaction so far has been limited in Europe. But
it's quite possible that the supply uncertainty alone could well
feed into a stronger platinum price as the week progresses."
Silver <XAG=> was at $17.82 an ounce versus $17.79.
(Reporting by Jan Harvey; Editing by Alison Birrane)
