By Nicholas Larkin June 9 (Bloomberg) -- Gold declined in New York as some investors sold the metal after its rally to a record and as a rebound in equities curbed demand for bullion as a haven asset. Gold futures climbed to a record $1,254.50 an ounce yesterday as holdings in the world’s biggest gold-backed exchange-traded fund advanced to an all-time high. 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. “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. Gold futures for delivery in August lost $10.60, or 0.9 percent, to $1,235 an ounce at 8:09 a.m. on the Comex in New York. Gold for immediate delivery in London was 0.3 percent lower at $1,233.45 an ounce. Spot prices reached a record $1,252.11 yesterday. “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.” 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 16 percent against the dollar this year. Gold ‘Vulnerable’ “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. The Stoxx Europe 600 Index gained as much as 1.3 percent after falling the previous three days. The euro was little changed against the dollar. Federal Reserve Chairman Ben S. Bernanke testifies before a House Budget Committee today after saying this week he’ll raise interest rates before the economy returns to full employment. ‘Sharp Price Correction’ 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. 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. Platinum for July delivery in New York added 0.6 percent to $1,538.60 an ounce. Palladium for September delivery gained 2.4 percent to $452.85 an ounce. Silver for July delivery was 1 percent lower at $18.295 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net.

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