Reuters LONDON - Gold hit five-month highs to within $US10 ($A11.14) of its December record peak as risk aversion returned on doubts over smaller euro zone countries' ability to cut their deficits despite a $US1 trillion aid package. The measures, unveiled on Monday, sparked a relief rally in assets seen as higher risk, such as the euro, stocks and industrial commodities. Gold slipped, but has recovered as the rally in other assets lost steam. Spot gold hit a peak of $US1,217.20 an ounce, its highest since early December, and was bid at $US1,216.76 an ounce at 1107 GMT, against $US1,201.90 late in New York on Monday. "The euphoria we saw yesterday has almost ended. Gold has remained well supported on safe-haven demand, and we think it will drive further from here," Commerzbank analyst Daniel Briesemann said. "Market participants are still concerned about the financial positions of a number of countries of the euro zone and their debt problems, despite last weekend's aid package." US gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $US15.80 to $US1,216.50 an ounce. Gold rallied last week on concern that Greece's debt problems would be echoed elsewhere in the euro zone, but slid two per cent on Monday after the rescue package sparked a relief rally across financial markets. That recovery fizzled out on Tuesday. The euro lost 0.8 per cent against the dollar, European shares fell two per cent in early trade and oil prices slid below $US76 a barrel. The dollar rose against a basket of currencies as risk appetite waned. Usually this would weigh on gold, which can be bought as an alternative to the US currency, but the usual strong link between the two has weakened in recent months. "Gold has recently proven an ability to escape from its traditionally negative correlation with the greenback as long as bullish drivers emanate from its safe-haven status or its perception as an asset of last resort, features it shares with the US currency," said Societe Generale in a note. Investment firm Investment in gold held firm, with holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, rising 3.652 tonnes to a record 1,192.150 tonnes on Monday. Its holdings have risen 33.148 tonnes, worth some $US1.275 billion at Monday's London afternoon fix price, in May so far. But high prices weighed on Indian gold demand, dealers said, after physical offtake saw a slight pick-up in the previous session ahead of the key gold-buying festival of Akshaya Tritiya on May 16, dealers said. Gold priced in Swiss francs hit a record high at 1,352.74 francs an ounce. Platinum group metals declined in line with other industrial commodities after Monday's bounce. Platinum was at $US1,677.50 an ounce against $US1,693, while palladium was at $US514 against $US529. "Given the current pressure on commodities and reduction in risk exposure, further consolidation can be expected short-term," said TheBullionDesk.com analyst James Moore. Silver was bid at $US18.39 an ounce against $US18.44. Holdings of the largest silver ETF, the iShares Silver Trust, rose 76.22 tonnes on Monday.

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