* Traders await direction from equities, Bernanke
* SPDR Gold ETF holds at record, iShares Silver rises again
* Palladium jumps 5 pct, correcting after fall
(Updates throughout, changes dateline - pvs TOKYO)
By Jan Harvey
LONDON, Feb 24 (Reuters) - Gold was little changed in Europe
on Tuesday as buyers took a break after the metal's rally to an
11-month high above $1,000 an ounce last week.
Traders say further stock market weakness in the United
States, the world's largest economy, or bad news from the
financial sector could spark another sharp rise as investors
seek a safe place to put their money.
Spot gold <XAU=> was at $989.15/990.75 an ounce at 1013 GMT
from $990.95 in New York late on Monday.
"We are going to be in a range of $975 on the downside and
$1,005 on the upside, in a bit of a reconciliation after the
sharp rally we saw last week," Afshin Nabavi, head of trading at
MKS Finance in Geneva, said.
"The banking crisis is continuing, and everyone was hoping
we had seen the bottom as far as equities were concerned, but
that doesn't seem to have been the case. Gold should continue to
benefit from that."
Traders are eyeing equities after a slide in U.S. stocks to
12-year lows lifted gold to session highs on Monday and falling
markets pushed gold over $1,000 an ounce on Friday.
Europe and Asia joined Wall Street's sell-off on Tuesday,
sending world stocks to their lowest since April 2003.
[]
Holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, held at a record near 1,029
tonnes on Monday. But that was their third straight session
without new inflows. []
"We do not believe this is anything to cause acute concern
as we are continuing to see heavy investment demand into
physical gold out of our Swiss sales desks," UBS strategist John
Reade said.
"But if the ETF inflows do not start again within a day or
two, some traders may attempt to test the downside in gold."
The dollar weakened against the euro but climbed to a
three-month high against the yen, supported by concerns over the
outlook for banks and the global economy. []
Gold is often bought as an alternative investment to the
U.S. currency and tends to move in the opposite direction to it.
This historic relationship has weakened in recent months but is
likely to revive as quantitative easing measures take effect.
OIL FALLS
The other main external driver of gold prices, oil, fell
towards $38 a barrel as global markets tumbled. []
Traders are also awaiting further news on U.S. measures to
shore up the ailing financial sector, after sources reported the
government is set to take a bigger stake in Citigroup <C.N> and
inject more cash into insurer AIG <AIG.N>. []
U.S. Federal Reserve Chairman Ben Bernanke is due to testify
before Congress on monetary policy later today, another event
which will closely watched. In the longer term, financial market
instability is expected to provide firm support to gold.
"Overall global financial market conditions remain weak and
we believe the safe-haven flight to gold can continue,"
Canada-based broker Canaccord Adams said in a note.
"Credit risk, while lower than most recent highs, is as high
as the first peak last March which coincided with the collapse
of Bear Stearns."
Among other precious metals, spot silver <XAG=> was steady
at $14.41/14.47 an ounce from $14.41.
Holdings of the iShares Silver Trust <SLV>, the world's
largest silver-backed ETF, rose 2 percent or 153 tonnes to a
record 8,180 tonnes on Monday. []
Spot platinum <XPT=> edged up to $1,079/1,084 an ounce from
$1,071, while spot palladium <XPD=> climbed more than 5 percent
to $205/210 an ounce from $195.50, in a correction after the
previous session's 8 percent fall.
(Editing by Sue Thomas)
