Gold slips but holds near record; ETF unchanged

Gold ticked lower on Wednesday but held near a lifetime high struck the previous day as investors bet the euro zone debt crisis could spread beyond Greece.

Jewellers in Asia cashed in on Tuesday's rally to a record $1,233.65 an ounce and dealers said the metal was likely to consolidate at current levels. But any correction could be limited as a $1-trillion European rescue package had done little to ease fears of euro zone debt contagion.

"I think sentiment is slightly bullish from here. We don't really know where the top is," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "We may be talking about $1,250."

Spot gold was at $1,227.50 an ounce by 0248 GMT, down $4.55 an ounce from New York's notional close on Tuesday, when safe haven buying helped it surpass December's record.

Some dealers said gains in silver were partly responsible for gold's rally. The white metal jumped to a five-month high on Tuesday on buying by funds attracted by the metal's cheap prices compared to gold, platinum and palladium, Gold priced in euro hit another record high on Wednesday.

"We've seen the worst and the market now needs a few days to consolidate. We'll probably wait again for leads from the stock markets today," said Darren Heathcote, head of trading at Investec Australia in Sydney.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings were unchanged at record high of 1,192.150 tonnes as of May 11.

US gold futures for June delivery added $10.3 an ounce to $1,230.6 an ounce.

Japan's Nikkei average edged up 0.5% on Wednesday, defying declines in New York but there were lingering fears the bailout package for Europe won't solve the region's deep-seated problems.

The euro dropped on persistent worries about the euro zone's ability to to deliver the drastic spending cuts and tax increases needed to tackle its debt crisis, while sterling held gains after a new UK coalition government was formed.