LONDON, May 24 (Reuters) - Gold rose to a two-week high on Tuesday as concerns about a spreading EU debt crisis fuelled safe haven buying, while a softer dollar provided support. Spot gold hit $1,521.80 a troy ounce, its highest since May 11. It was bid at $1,520.59 an ounce at 0944 GMT from $1,516.05 late in New York on Monday. Portugal and Ireland would be at risk of multi-notch credit downgrades, pushing their ratings into junk territory in the event of a default by Greece, Moody's EMEA chief credit officer told Reuters. [ID:nATH006096] "There is so much uncertainty that the downside risk for gold is low in the short term," said VTB Capital analyst Andrey Kryuchenkov. "People are still frightened about Portugal and about a possible restructuring of the Greek debt so safe haven flows will continue," he said. But in the long term there may be some headwinds for the precious metal such as a possible decision of the U.S. Federal Reserve to hike interest rates, Kryuchenkov said. Low interest rates help gold which competes with yield-bearing assets for investors cash. "We expect gold prices to continue to climb in 2011 as the resumption of quantitative easing should keep U.S. real interest rates low," said Goldman Sachs in a note. "However ... we expect U.S. real interest rates to begin to rise into 2012, likely causing gold prices to peak in 2012." A lower U.S. currency, which makes commodities priced in dollars cheaper for holders of other currencies, was also supporting gold. [USD/] Gold prices in British pounds hit a record high of at 944.18 pounds an ounce. Gold denominated in euros hit a record high of 1,081.43 euros. "We like (gold in euros) right now, considering the breadth and depth of risk-sapping variables that currently prevail," UBS said in a note. RENEWED INTEREST Renewed investor interest in gold was reflected in inflows into the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust , which rose 0.63 percent on Monday from Friday. Holdings in the largest silver-backed ETF, New York's iShares Silver Trust , dropped 0.15 percent on Monday. [ID:nSGE74M015]. Spot silver was bid at $35.65 an ounce from $35.04 late on Monday and platinum at $1,759.75 from $1,748.35. "Everyone is cautiously optimistic about PGMs (platinum group metals). We certainly don't expect strong gains but they will move up gradually," Kryuchenkov said. "There are many supportive factors (PGMs). You can still justify their prices with fundamentals, and the recovery in the automotive sector is under way." Spot palladium was bid at $732.97 an ounce from $727.99 late on Monday. Both platinum and palladium are used to make catalytic converters for cars, production of which is expected to rise this year and next. [ID:nCARS1]

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