By Nicholas Larkin June 9 (Bloomberg) -- Gold fluctuated in London after reaching a record yesterday, as concern over Europe’s debt crisis boosts demand for bullion as a haven asset. Gold climbed to a record $1,252.11 an ounce yesterday as holdings in the world’s biggest gold-backed exchange-traded fund advanced to an all-time high. Bullion’s gains were capped as European stocks climbed today on increased confidence that the global economy can withstand the effects of the region’s sovereign-debt crisis, as Reuters reported that China’s exports surged. “In the long run, the trend is still bullish and investors will be keen to throw everything at gold in case matters escalate from here,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. Short-term, “provided we still do not breach $1,250 on a second attempt today, then gold could pull back toward $1,200.” Gold for immediate delivery lost $1.30, or 0.1 percent, to $1,235.25 an ounce at 10:29 a.m. local time. Prices gained as much as 0.4 percent and fell as much as 0.4 percent. Bullion for August delivery was 0.7 percent lower at $1,236.80 on the Comex in New York. “Equity markets are positive, and that’s weighing a little on gold,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. Investor sales to lock in gains from the advance to a record “may also be the case for lower prices,” he said. Bullion jumped 13 percent this year and is on course for a 10th straight annual advance, the longest run of gains since at least 1920. The metal has gained amid speculation that debt- cutting measures by European nations will slow growth. The euro is down 17 percent against the dollar this year. Profit-Taking Vulnerability “Gold is likely to make another attempt to breach the $1,250 level,” said Wong Eng Soon, Singapore-based commodity analyst with Phillip Futures Pte Ltd. “Volatile financial and currency markets will drive investors to acquire gold. Still, gold remains vulnerable to profit taking at such high prices.” Gold climbed to a record in euros, British pounds and Swiss francs yesterday as investors sought to preserve their wealth against declining currencies. Highs in other currencies reaffirm gold’s broad-based appeal and provide “evidence the rally is not solely a function of currency movements,” HSBC Securities analyst James Steel wrote in a note to clients. Assets in the SPDR Gold Trust, the biggest ETF backed by bullion, increased 12.17 metric tons to a record 1,298.53 tons yesterday, according to the company’s website. ‘Sharp Price Correction’ Still, “the physical market is unlikely to provide much support for gold over the summer months, typically the seasonally weakest for jewelry demand,” Royal Bank of Scotland Group Plc analysts including Nick Moore said in a report today. “If/when investor momentum wanes, we believe that gold may be vulnerable to a sharp price correction.” Gold Fields Ltd. said it has lost about 500 ounces of gold production from its Driefontein mine in South Africa since two rockfalls on June 7. The mine produces about 200,000 ounces per quarter, and a government safety inspection is scheduled to take place tomorrow, said spokesman Sven Lunsche. Silver for immediate delivery in London was 0.1 percent lower at $18.2625 an ounce. Palladium added 0.7 percent to $445.45 an ounce, while platinum was little changed at $1,530.70 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.

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