MARKETS-PRECIOUS (UPDATE 5)
* Dollar strengthens as euro, stocks, commodities fall
* ETF holdings at record but Q3 gold demand seen weak
* Silver, platinum, palladium underperform gold
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By Jan Harvey
LONDON, June 29 (Reuters) - Gold eased on Tuesday as sliding stock markets and a strengthening dollar prompted selling of commodities, though ongoing concerns over euro zone debt supported safe-haven demand for the metal, limiting losses.
Equities dropped in Europe and the United States, extending losses after weak U.S. June consumer confidence data. This weighed heavily on assets like stocks, oil and base metals, though gold, in comparison, remained relatively resilient.
Spot gold was bid at $1,232.70 an ounce at 1425 GMT, against $1,236.05 late in New York on Monday. U.S. gold futures for August delivery eased $5.40 cents to $1,233.20.
VTB Capital analyst Andrey Kryuchenkov said while risk aversion is still supporting gold, he expects the metal to remain under pressure from the stronger dollar, losses in other commodities and weakness in seasonal physical demand.
"Sentiment is still sour, but physical will not buy here," he said. "The upside is capped with the market being overly long, and the U.S. dollar is set to remain more or less well supported."
Gold, like other dollar-priced assets, typically weakens as the U.S. currency firms. Early this year that relationship broke down as both were lifted by risk aversion, but the usual link is being re-established.
"I notice that in extreme cases of persistent flight to safety, (gold and the dollar) trend together, but when matters calm down and the greenback hold strong, gold corrects a little with other metals," said Kryuchenkov.
The dollar rose against a basket of currencies on Tuesday, while the euro hit a lifetime low against the Swiss franc and a 1-1/2 year low versus sterling amid concerns over the expiry of a key euro zone refinancing program this week.
Meanwhile oil prices fell more than 3 percent to below $76 per barrel as stock markets slumped and risk appetite dwindled on renewed worries over euro zone debt, while base metals like copper, lead and zinc slid more than 4 percent.
The Reuters-Jeffries CRB index, a global commodities benchmark, fell to a two-week low on Tuesday.
EQUITIES SLIDE
European shares slid to a near-three week low, while the S&P 500 and Dow Jones Industrial Average in New York fell more than 2 percent.
Stocks are dropping on fresh concerns over fiscal problems in the euro zone ahead of bank repayments to the European Central Bank this week.
Investment demand for physical gold remained a support for prices, with holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, still at a record high 1,316.177 tonnes on Monday.
But gold is entering a seasonally weak period for physical demand, which could undermine any push higher, analysts said.
"June-August are the months in which demand for gold retreats," said Societe Generale in a note. "Along with the onset of the vacation period in North America and Europe, the Indian market slows significantly."
"The average difference in tonnage (consumption) between the second and third quarters 2000-2008 was 41 tonnes," it added.
Other precious metals underperformed gold, with silver easing to $18.44 an ounce against $18.68, platinum to $1,535 an ounce against $1,565, and palladium to $451.50 against $466. (Editing by Alison Birrane)
