Gold held firm on Friday in Europe, but dollar strength against the euro and stronger equity market sentiment were expected to weigh on prices.
The euro slipped against the dollar, giving back some of the hefty gains made on Thursday when China said Europe would remain a major investment market for its foreign exchange reserves.
"Some of it is currency related, some of it is equity markets," a London-based trader said. "Investors are loking at equity markets, which are said to be cheap, so their money will go there. Gold is expensive."
A higher US currency makes commodities priced in dollars cheaper for holders of other currencies.
Gold hit a record high of $1 248.95 an ounce on May 14, a rise of nearly 20 percent since early February.
"There are increased signs of risk easing, from very high levels," Standard Bank said in a note.
"Despite the risk easing, gold remains well supported above $1 200. Investor interest remains high, and ETF (exchange traded fund) holdings continue to grow."
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings totalled 1 236.889 tonnes as of May 24 versus 1 220.152 tonnes previously, marking a fresh record high.
PRICES
* Spot gold was bid at $1 214.31 a troy ounce at 08:51 SA time from $1 211.10 an ounce late in New York on Thursday when it touched $1 218.35, its highest since May 19.
* Silver was at $18.48 from $18.45.
* Platinum at $1 553 from $1 561.
* Palladium at $461 from $462.
DATA/EVENTS
* US April personal income and consumption and New York ISM due at 14:30 SA time. Chicago PMI at 15:45 SA time.
* Bundesbank conference on International Risk Sharing and Global Imbalances. Panelists are ECB Executive Board member Lorenzo Bini Smaghi, ECB Governing Council member Axel Weber and BoE's Adam Posen.
MARKET NEWS
* Asian stocks rallied for a third straight day on Friday as China's pledge to remain invested in Europe lifted sentiment but the euro ceded some of its gains after bouncing from near four-year lows the previous day.
* Oil touched a two-week high above $75 on Friday, heading for the first weekly gain in almost a month, on rallying stock markets and expectations of rising US consumption during the summer holiday season.
FUNDAMENTALS
* The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings totalled 1 236.889 tonnes as of May 24 versus 1 220.152 tonnes previously, marking a fresh record high.
* Rising investor demand and a recovery in industrial demand during 2009 were key factors in a strong recovery for silver prices last year, according to World Silver Survey 2010, released on Thursday by the Silver Institute.
* British platinum refiner Johnson Matthey said it will close its Vertec unit in Birmingham, central England, putting 50 jobs at risk.
TECHNICALS
* Gold support at $1 191 an ounce, resistance at $1 231 and 14-day RSI at 60.
* Platinum support at $1 533 an ounce, resistance at $1 613 and 14-day RSI at 39.
* Silver support at $18.16 an ounce, resistance at $18.90 and 14-day RSI at 55. - Reuters
