SINGAPORE (Commodity Online) : Gold recovers marginally in Asian trade Friday after an overnight drop of nearly one percent while ETF holdings rose to another record.

Gold for immediate delivery was seen trading at $1219.54 an ounce at 11.30 a.m Singapore time while U.S. gold futures for August delivery was at $1221.81 an ounce.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to a lifetime high at 1,306.137 tones as of June 10.

The euro's short-covering rally paused above $1.2100 on Friday, with the single currency squaring up to test significant bands of resistance, and the Australian dollar held strong gains as firmer share markets improved risk tolerance.

However analysts said the precious yellow metal remained vulnerable to movements in equity and currency markets, with rallies in shares likely to curb gains.

On Thursday, prices slipped as investors sold gold for equities and continued to take profits after gold's record high . August delivery settled down $7.70 to $1,222.20 an ounce at the Comex division of the New York Mercantile Exchange.

Spot gold hit a low of $1214.65 and was at $1218.25 in late New York trade, against $1230.35 late in New York on Wednesday.

Heavy losses in the euro on the back of European sovereign debt concerns have lifted demand for gold this year as investors sought to diversify out of the currency. Analysts said.