* SPDR Gold ETF holds at record, iShares Silver rises again
* South African gold production falls 13.6 pct in 2008
(Updates prices, adds comment, detail)
By Jan Harvey
LONDON, Feb 24 (Reuters) - Gold slipped 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, but analysts said the
metal would stay supported by strong invetor interest.
However, 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=> hit a session low of $968.60 an ounce and
was at $987.10/989.10 an ounce at 1602 GMT from $990.95 in New
York late on Monday.
"The banking crisis is continuing, and everyone was hoping
we had seen the bottom as far as equities were concerned," said
Afshin Nabavi, head of trading at MKS Finance in Geneva.
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. []
New York shares bounced on Tuesday as investors bought
beaten down shares, although data showed U.S. home prices fell
at a record pace in December while consumer confidence hit a
record low in February as Americans feared the current recession
would only get worse.
Gold's failure this week to revisit last week's highs above
$1,000 an ounce has triggered a bout of profit-taking by
short-term investors hoping the precious metal would break
through last March's $1,030.80 record high.
However, investor interest in physical gold can be seen in
holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, which held at a record near
1,029 tonnes on Monday.
ACUTE CONCERN
But it was the SPDR's 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.
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. []
The other main external driver of gold prices, oil, steadied
after earlier losses as investors mulled the impact of OPEC
supply cuts. []
In supply news, South Africa's Chamber of Mines said the
country's total gold mine production fell 13.6 percent to
220,127 kilograms in 2008, and 10.7 percent year-on-year in the
fourth quarter. []
Output had been hit by the impact of the electricity supply
crisis early in the year and lower average grades, it said.
Among other precious metals, spot silver <XAG=> was at
$14.27/14.33 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. []
"The metal continues to draw fresh buying as a proxy for
gold," said Barclays Capital in a note.
Spot platinum <XPT=> was at $1,044/1,049 an ounce from
$1,071, while spot palladium <XPD=> was at $196/200 an ounce
from $195.50.
Earlier it climbed more than 5 percent in a correction after
the previous session's 8 percent fall.
(Additional reporting by Pratima Desai and Michael Taylor)
(Editing by Keiron Henderson)
