* Gold prices rally to all-time highs in London, New York
* Prices also hit records in euros, sterling, Swiss francs
* Euro, equities give up early gains to turn lower
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, June 8 (Reuters) - Gold hit a record dollar high
above $1,250 an ounce and new peaks in other currencies on
Tuesday as concern over Europe's economic outlook lifted risk
aversion, reversing early gains for the euro and stock markets.
Concern grew over prospects for a European economic recovery
after ratings agency Fitch warned the UK faced a "formidable"
challenge in its plan to cut government borrowing.
[]
Spot gold <XAU=> rose as high as $1,251.50 an ounce, and was
at $1,247.45 an ounce at 0956 GMT against $1,238.05 late on
Monday. U.S. gold futures for August delivery <GCQ0> hit a
record $1,254.50 and was later up $9.20 at $1,250 an ounce.
The precious metal is benefiting from fears the euro zone's
sovereign debt crisis may spread, weighing on global economic
recovery, analysts said.
"It is mainly the fear of another slide into recession which
is seeing demand for gold as a safe haven," said Commerzbank
analyst Daniel Briesemann.
"Gold is currently rising in dollars and in euros," he
added. "There is a lack of confidence, given the uncoordinated
measures against the sovereign debt crisis, which is obviously
(affecting) both currencies."
Euro-priced gold <XAUEUR=R> also hit a record 1,050.86 euros
an ounce, while gold priced in sterling <XAUGBP=R> and Swiss
francs <XAUCHF=R> hit all-time highs of 869.87 pounds an ounce
and 1,450.40 francs an ounce respectively.
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The euro <EUR=> gave up early gains versus the dollar to
fall on Tuesday, having tumbled to a four-year low a day before.
Euro zone sovereign debt concerns resurfaced this week after
Hungary warned about its deficit on Friday. []
Equities surrendered early gains, giving up 1.4 percent.
World stocks <.MIWD00000PUS> also fell. []
Core euro zone debt futures hit a contract high and the
premium investors demand to hold 10-year French, Italian and
Spanish government bonds rather than German benchmarks rose on
Tuesday in risk-averse trading. []
With the fear factor still dominating the financial markets,
gold is set for further gains, analysts said. "Right now it's
too difficult to stand in front of a moving train," said UBS
analyst Edel Tully in a note.
INVESTMENT FIRM
Investment interest in gold held firm, with holdings of the
world's largest gold exchange-traded fund, New York's SPDR Gold
Trust <GLD>, unchanged on Monday, but high prices weighed on
physical demand in the world's top gold consumer, India.
Premiums for gold bars slipped in Asia on Tuesday after
bullion raced towards a lifetime high, while purchases from
Indian jewellers slowed to a trickle as the monsoon progressed
in the world's largest consumer. []
From a technical perspective, gold's break higher on Monday
has left it well positioned to make new highs, according to
analysts who study charts of past price movements to determine
the future direction of trade.
"Gold in dollars broke through $1,232 retracement
resistance, clearing the way for a retest of $1,250..., while
gold in euro terms again made new bull market highs," said
Barclays Capital technical analysts in a note.
"In dollar terms, $1,250 may prove to be near-term
resistance, but we ultimately target a run toward long-term
channel resistance at $1,374. In euro terms, we target $1,118
following the break of $1,013 range highs."
Silver <XAG=> was bid at $18.35 an ounce against $18.09,
platinum <XPT=> at $1,522.75 an ounce versus $1,512, and
palladium <XPD=> at $430.20 versus $430.
(Reporting by Jan Harvey; Editing by Sue Thomas)
