Gold prices rose on Tuesday ahead of a summit between French and German leaders on the euro zone debt crisis, though the precious metal pared gains after rating agency Fitch affirmed its triple-A rating on the United States.

The Fitch news helped European shares and the euro rise from lows, although they remained under pressure after poorly received German and euro zone growth data stoked concerns the region may be far from recovering its economic footing.

Spot gold was up 0.5 percent at $1,773.59 an ounce at 9:47 a.m. EDT, partially reversing a correction it began late last week after hitting a record $1,813.79 on Thursday. It is up 25 percent this year, driven by worries over U.S. and euro zone debt.

"The broader market is still nervous and uncertain ahead of the Merkel/Sarkozy meeting today," said Andrey Kryuchenkov, an analyst at VTB Capital.

"(If) risk sentiment does not get much worse, we (will) consolidate here. Otherwise it's back to $1,795 and then $1,800. As before, investors will be unwilling to liquidate."

Stock markets recovered some lost ground and the euro lifted from lows after Fitch said it was affirming the U.S. triple-A rating.

Earlier, European shares .FTEU3 fell more than 1 percent after German gross domestic product growth slowed by more than expected in the second quarter, weighed by a negative trade balance, flagging consumption and weak construction investment. .EU

The data pushed the euro down versus the dollar, while German government bonds firmed as a tentative recovery in risk appetite soured.

Risk appetite was further dampened by a subsequent reading of euro zone GDP, which showed the region's economy grew less than forecast in the second quarter.

"Gold prices have benefited from the perceived severity of the risks as well as a noticeably reduced market faith in the conventional international monetary system," said Barclays Capital in a note.

U.S. gold futures for August delivery were up $18.50 an ounce at $1,776.50.


The largest gold fund players, including hedge fund titan John Paulson, stuck with their bullion bets in the second quarter, opting not to follow George Soros, who further reduced his gold ETF holdings, data showed on Monday.

Outflows from the world's largest gold-backed exchange-traded fund ceased on Monday, with its holdings remaining unchanged after a nearly 50 tonne decline last week.

Swiss bank UBS said in a note on Tuesday its latest client poll showed 60 percent of respondents expected gold to be trading above $1,800 by year-end and 32 percent saw prices attaining $2,000 or higher.

"That a majority of respondents expects gold to end the year above current very elevated levels suggests that the macroeconomic backdrop is expected to remain supportive and that September will again bring traditionally strong seasonal physical demand," the bank said in a note.

Among other precious metals, silver was down 0.8 percent at $39.54 an ounce.

The gold:silver ratio, or the number of silver ounces needed to buy an ounce of gold, rose back to 45 on Tuesday, having dipped below that level on Monday after prices corrected.

"Silver has been a sideways trade between $37.10 and $42.18 for the past month," said ScotiaMocatta in a note.

"The metal has not been able to shake off the stigma from the bubble-like drop in April/May. We would only become bullish silver on a close above 50 percent level (at) $41.05."

Among other precious metals, spot platinum was up 0.4 percent at $1,811 an ounce, while spot palladium was up 0.4 percent at $747.22 an ounce.

(Editing by Jane Baird)