* Greek party leaders says cannot back bailout deal

* Euro falls further from two-month high, stocks ease

* South African leader squashes mine nationalisation talk (Updates prices, adds comment)

By Jan Harvey

LONDON, Feb 10 (Reuters) - Gold fell more than 1 percent on Friday, hurt by a slide in the euro after a Greek party leader said he couldn't back the 130-billion euro bailout deal the country needs to avoid going bankrupt, which comes at the cost of painful austerity measures.

Euro zone finance ministers are still seeking further measures fromGreece  before signing off on a second bailout.

Spot gold was down 1.4 percent at $1,706.46 an ounce at 1324 GMT, while U.S. gold  futures  for February delivery were down $32.60 an ounce at $1,708.60.

The euro fell after the leader of the far-right party in Greece's coalition said he could not back the bailout agreement, reigniting worries about the risk of a chaotic default.

" Today, the market is in risk-off mood again with stock markets weaker as well," said Alex Zumpfe, a trader at Heraeus precious metals house. " Gold is facing some selling pressure after support levels didn't trigger sufficient buying interest.

" Physical buying evolved on the lows but were obviously not strong enough to support the market," he added. " Technically, it cannot be ruled out that further weakness might occur if the 1,710 area doesn't hold."

Risk aversion drove safe-haven German bonds sharply higher, while European shares fell, dragged lower by banks on concerns about the outcome of the  euro zone  debt crisis.

Other commodities also fell, with prices of base metals like copper and aluminium weakening on worries about Greece's bailout plan, while crude oil slipped, halting an eight-day rally, as the International Energy Agency (IEA) cut its oil growth demand forecast for a sixth consecutive month.

Against this backdrop, gold looks vulnerable to a correction after rising nearly 10 percent so far this year.

" Gains in the U.S. dollar and consistent disappointment from the European Union regarding the Greece debt deal are curbing any gains in gold," said Pradeep Unni, senior analyst at Richcomm Global Services.

" Even if a debt deal does come out, the complications are far from over. With an over 26 percent unemployment rate in Greece, austerity means further job cuts, and tax increases," he added. " The key point on pensions are still to be finalised."

INDIAN DEMAND FIRMS

More price-positive news has emerged, however. The biggest operator of U.S. futures exchanges, the CME Group, on Thursday lowered trading margins for a range of commodities contracts, including gold, silver and platinum.

" In August and September of last year, CME almost doubled the margin within just a few weeks, thereby contributing to the sharp fall in the price of gold," Commerzbank said in a note.

Indonesia  is to ban exports of some raw materials, including gold and silver, from 2014, the Mineral Resources Ministry said. The country was the world's seventh-largest gold producer last year with output of 115 tonnes, according to metals consultancy GFMS, and produced 6.9 million ounces of silver in 2010, making it Asia's fourth-largest miner of the metal.

Silver was down 1.7 percent at $33.30 an ounce. Spot platinum was down 1.4 percent at $1,649.49 an ounce, while spot palladium was down 1.9 percent at $693.50.

President Jacob Zuma squashed more than two years of talk on Friday about the nationalisation of South Africa's massive mining sector, saying state control or ownership of the mines in the world's biggest platinum producer could not work.

However, South Africa's mining sector - the fifth-biggest in the world by value - faces the prospect of higher taxes and royalties as the government tries to squeeze out better returns for the country's 50 million people.

" Had the ANC promoted a pro-nationalization agenda we believe the impact on PGM prices would have been very bullish as foreign investment and quite possibly professional expertise would have deserted the country," said HSBC in a note.

" As it stands we believe the report is still modestly bullish. Higher taxes on producers are bound to curb investment and production to some degree, all other factors being equal." (Additional reporting by  Veronica Brown editing by James Jukwey) 

* CME cuts gold, silver, platinum margins
    * Spot gold may fall to $1,698/oz - technicals
    * Coming up: U.S. Int'l trade, Dec  1330 GMT

    By Rujun Shen	

    SINGAPORE, Feb 10 (Reuters) - Gold hovered unchanged
at around $1,730 an ounce on Friday in cautious trade as euro
zone finance ministers held off on approving a bailout package
for Greece even after it said it had clinched a deal on economic
reforms.	
    Even a cut in the metal's trading margins by the biggest
operator of U.S. futures exchanges, the CME Group, failed to
spark the enthusiasm of sidelined investors, and kept spot gold
 prices little changed at $1,732.34 an ounce by 0315 GMT,
after two straight days of losses.	
    U.S. gold edged down 0.3 percent to $1,735.40.	
    " Many are still standing on the side waiting for something
new to happen in the market,"  said Peter Fung, head of dealing
at Wing Fung Precious Metals in Hong Kong.	
    " COMEX cut margins probably because the market volatility
was low and people didn't have much interest,"  he added.	
    Gold prices have been heavily influenced by the grinding
process of getting Greece to agree to reforms and austerity
measures in exchange for a bailout from its international
lenders. 	
    Market participants expect gold to be trapped in a range of
between $1,710 and $1,760 in the absence of a fundamental shift
in sentiment.	
    The CME Group on Thursday lowered trading margins
for a range of commodities contracts, including gold, silver and
platinum, effective after the close of business on Monday. This
is the first margin cut for COMEX gold since June 2011.
  	
    Technical analysis suggested spot gold could fall to $1,698
during the day, said Reuters market analyst Wang Tao.
 	
    	
    SPDR Gold Trust, the world's biggest gold-backed
exchange-traded fund, reported that its holdings increased to
1,278.344 tonnes by Feb. 9, the highest level since late
December, showing investment demand in bullion remained steady
as the murky economic outlook supported safe-haven interest.	
    The total amount of gold held by gold ETFs was little
changed from a week earlier, after four weeks of gains.
 	
    Spot platinum edged down 0.1 percent to $1,649.74,
headed for a 2-percent weekly rise. An 18-percent year-to-date
rise helped platinum narrow its discount to gold to near $70
earlier this week, its lowest in more than four months.	
    Concerns about supply shortfalls in South Africa, the
world's top producer of the metal, may continue to support
platinum prices and lower its discount to gold, analysts said.