By Pham-Duy Nguyen and Nicholas Larkin May 10 (Bloomberg) -- Gold fell from near a five-month high on speculation that an emergency fund agreed to by European policy makers will be enough to contain sovereign-debt risks and help maintain growth in the region. Platinum and palladium rose. European finance ministers agreed to an unprecedented loan package worth almost $1 trillion and a program of bond purchases to support debt-laden governments. Last week, gold futures traded within 1 percent of the Dec. 3 record of $1,227.50. “For the time being, gold’s ultimate safe-haven status is reduced,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland. Gold futures for June delivery fell $9.60, or 0.8 percent, to $1,200.80 an ounce at 9:26 a.m. on the Comex in New York. That’s the greatest decline since May 4. Earlier, the price fell as much as 2.1 percent. In the loan package, euro-area governments pledged to make 440 billion euros ($570 billion) available, with 60 billion euros more from the European Union’s budget and as much as 250 billion euros from the International Monetary Fund, Spanish Economy Minister Elena Salgado told reporters in Brussels. “Because of the European rescue news, gold goes lower before it goes higher,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “All they did is kick the can down the road.” Before today, gold futures gained 10 percent this year as escalating financial turmoil in Europe boosted demand for safer assets, including the dollar. Gold priced in euros, sterling and Swiss francs all touched record highs last week. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, climbed 2.71 metric tons to an all-time high of 1,188.5 tons on May 7, according to figures on the company’s website. The fund holds more metal than Switzerland’s central bank. “We suggest that the EU mega-package will stem contagion fears and stabilize financial markets, and that the resulting rise in risk sentiment should lead to a relief rally across many risk assets, including platinum and palladium,” UBS AG analyst Edel Tully wrote in a report today. Palladium prices, which fell below $500 an ounce last week, “proved attractive” and spurred industrial demand, helping to establish “a floor.” Silver for July delivery in New York rose 12.4 cents, or 0.7 percent, to $18.575 an ounce. Platinum for July delivery increased $29.70, or 1.8 percent, to $1,695.50 an ounce. Palladium for June delivery climbed $18.30, or 3.6 percent, to $528.50 an ounce. To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net. Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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