(Reuters) - Gold eased in Europe on Friday, retreating further from this week's record high, as European leaders' agreement of a rescue package for debt-laden Greece boosted appetite for assets seen as higher risk, like stocks, at the metal's expense. Prices remain supported above $1,580 an ounce, however, by doubts that the euro zone is yet out of the woods, and as negotiations over the management of U.S. debt rumble on in Washington. Spot gold was down 0.1 percent at $1,586.58 an ounce at 0926 GMT, but is still up 12 percent so far this year. "There could be more of a correction if this crisis is really calming down, but it is too early to say that all is going to be well," said Peter Fertig, a consultant at Quantitative Commodity Research. "Don't forget that even if there is now less need to invest in gold as a safe haven from European investors, you still have the debt situation in the United States, where the debt ceiling has to be lifted." Prices rose as high as $1,609.51 an ounce on Tuesday on concerns that the debt crisis that engulfed Greece would spread to larger euro zone economies like Italy and Spain, but it failed to hold the $1,600 an ounce level after a rescue deal was struck on Thursday. An emergency summit of leaders of the 17-nation bloc pledged to conduct a second bailout of Greece with an extra 109 billion euros ($157 billion) of government money, plus a contribution by private sector bondholders. The euro rebounded from recent lows on the news, rising to a two-week high versus the dollar on Friday, while European shares rose. Oil prices also climbed as the package helped offset weak data from China. .EU Assets typically seen as safe havens suffered, however, with the Swiss franc falling 1 percent versus the euro while German bond futures slid. The cost of insuring against a default by euro zone sovereign issuers fell. NOT OUT OF THE WOODS But these short-term moves notwithstanding, expectations are high that the euro zone's financial problems may persist. "While yesterday's agreement was as comprehensive as it could possible be, many legal and political issues need to be ironed out and the crisis is far from solved," said Swiss bank UBS in a note. "Although gold could lose steam in the short term, Europe will remain a primary catalyst for further gains over the medium term. That gold hasn't reacted to any great extent suggests that many investors are not fully convinced by yesterday's developments." In Washington, efforts to avoid a U.S. default are set to enter a critical stage on Friday, with President Barack Obama and top lawmakers engaged in a sometimes chaotic drive to strike a sweeping deficit-reduction deal. Negotiators have struggled to agree on terms for raising the government's $14.3 trillion debt ceiling. If it fails to do so by an August 2 deadline, the world's biggest economy would be unable to pay all of its bills. Demand for physical gold in major consumer India was light, meanwhile, as buyers took to the sidelines, awaiting further clarity on price direction. "Clients are waiting for prices to break on either side," said a Singapore-based dealer. Interest in gold-backed exchange-traded funds was also light, with holdings of the largest, New York's SPDR Gold Trust, easing 0.3 percent on Thursday. Among other precious metals, silver was bid at $39.03 an ounce against $39.28, having tracked gold up to 2-1/2 month highs earlier this week. "Recovering industrial demand due to stronger global economic growth anticipated for 2011 should be the key driving factor which will see silver outperforming gold," said Credit Agricole in a note. "Investor appetite, though, should still be the key driver of price strength, as investors view silver to be in a win-win situation under most scenarios -- tracking gold higher on safe haven flows and also rallying in line with the rest of the industrial metals complex." Spot platinum was at $1,780 an ounce versus $1,781, and spot palladium at $797.73 an ounce against $805.47.

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