* Oil rises around 2 pct on Goldman Sachs forecast
* Euro up slightly on German business sentiment
* Moody's warns of contagion from Greece (Updates with U.S. markets close)
By Walter Brandimarte
NEW YORK, May 24 (Reuters) - Oil jumped about 2 percent on Tuesday after Goldman Sachs forecast robust fuel demand growth, while the euro pulled away from a two-month low against the dollar on better-than-expected German data.
Nagging euro zone debt fears kept market sentiment fragile, however, curbing gains in the euro and driving gold prices to a 20-day high.
Goldman Sachs, one of the most influential institutions in the global oil spot market, raised its 12-month price forecast for Brent crude to $130 a barrel, citing global economic growth and tight OPEC spare capacity. For details, see [ID:nL3E7GO153]
"Investors are realizing that, at the end of the day, there's more demand for commodities than there is supply. That means the long-term trend is higher," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York.
U.S. crude oil
Energy-related shares gained with oil prices and provided a small boost to global equities, driving the MSCI All-Country World index <.MIWD00000PUS> 0.26 percent higher, a day after it dropped 1.8 percent.
The FTSEurofirst 300 <.FTEU3> index of top European shares closed up 0.2 percent, though it remained 0.28 percent lower for the year to date. Miners were among the biggest gainers.
Energy shares also rose on Wall Street, but key U.S. stock indexes fell with technology and industrial shares, as concerns about the U.S. economic recovery still haunted investors.
The Dow Jones industrial average <.DJI> ended down 25.05 points, or 0.20 percent, at 12,356.21, while the Standard & Poor's 500 Index <.SPX> dipped 1.09 points, or 0.08 percent, to end at 1,316.28. The Nasdaq Composite Index <.IXIC> fell 12.74 points, or 0.46 percent, at 2,746.16.
The U.S. stock market had closed at its lowest in a month on Monday.
A Reuters poll of top financial institutions found that economists have cut back their expectations for U.S. economic growth this year. For details, see [ID:nN2439520]
The median of forecasts from economists at 18 of 20 primary dealers was for an annualized gross domestic product growth of 2.85 percent this year, down from a median of 2.95 percent in a similar poll on April 1.
"There isn't much for the market to get excited (about) at this point, especially going into summer months and the QE coming to an end soon," said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.
Next month's end of the Federal Reserve's massive bond-buying program, also known as quantitative easing, or QE2, is expected to weigh on stocks and the euro, a Reuters poll showed last week. [ID:nSLAJGE7U1]
EURO RECOVERS
The euro
The euro's gains were said to be contained by concerns about the impact of a possible debt default by Greece in other peripheral euro-zone economies.
Monday's sell-off of the euro followed another credit downgrade of Greece, a ratings warning about Italy and a Spanish voter revolt against austerity measures designed to address the country's debt. [ID:nLDE74M0V7]
Underscoring those risks, Moody's Investors Service said on Tuesday a debt default by Greece could knock the ratings of Portugal and Ireland into junk territory. [ID:nLDE74N0AQ]
"A Greek default would be highly destabilizing and would have implications for the creditworthiness of issuers across Europe," Moody's EMEA chief credit officer Alastair Wilson told Reuters.
Gold prices
Silver
U.S. Treasury debt prices erased early losses after an auction of $35 billion of two-year notes found solid demand. Benchmark 10-year Treasury notes were up 2/32 in price, with their yield at 3.1194 percent.