UPDATE 1-ETFS Physical Gold sees record 1-day inflow

* Holdings of Physical Gold fund up 18 pct since Aug. 17

* Wariness over recovery seen turning investors towards gold

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By Jan Harvey

LONDON, Aug 26 (Reuters) - ETF Securities said on Wednesday it saw the biggest ever one-day inflow into its ETFS Physical Gold exchange-traded commodity (PHAU.L) on Aug. 25, as investors bought the metal as a haven from risk in the wider markets.

The ETC's holdings jumped 7 percent or 211,500 ounces to 3.190 million ounces of bullion on Tuesday, from 2.978 million ounces the day before, it said.

ETCs issue securities backed by physical stocks of a given commodity. Buying of precious metals to back ETCs and similar products has formed a major plank of demand in recent years.

Nicholas Brooks, head of research at ETF Securities, said the fund had seen more inflows over the last week than at any time since its initial listing. By Tuesday the fund's holdings were up 18 percent from the Monday before.

"Investors are being increasingly wary about the recent rally in risk assets, and I suspect they are using gold as a hedge against the possibility of a correction," Brooks said.

Gold prices have held firm in 2009, spending most of the year above the $900 an ounce level, as fears over the outlook for the global economy sparked buying of the precious metal as a haven from risk.

In the longer term, concern over the prospect of inflation, against which bullion is often bought as a hedge, is also supporting prices. Spot gold XAU= was at $948.60 an ounce at 0844 GMT.

(Reporting by Jan Harvey; Editing by Peter Blackburn)