* Gold rises above $980/oz as dollar hits record low
* Safe haven flows boost gold
* Investors await Fed Chairman Bernanke's testimony
(Recasts, adds comment/detail, changes dateline, pvs Singapore)
By David Sheppard
LONDON, July 15 (Reuters) - Gold jumped to a 4-month high
above $980 an ounce on Tuesday and was eyeing the psychological
$1,000 level as investors fleeing financial market turmoil
sought refuge in the precious metal.
Spot gold <XAU=> hit $983.50 an ounce, the highest since
March 19 before easing to $982.900/983.90 an ounce at 1016 GMT,
against $971.20/972.20 late in New York on Monday.
Gold has risen by more than 7 percent in the past week on
financial uncertainty, a sliding dollar and record high oil.
UBS this week forecast gold prices would average $1,000 an
ounce in July.
"The dominant change of the last couple of weeks has been
increased fears of systemic financial risk," said metals analyst
John Reade at UBS.
"There's a lot out there at the moment -- inflation and
stagflation fears, the dollar's fall and geopolitical problems
but the move higher has primarily been triggered by rising
financial risk aversion."
The latest bout of uncertainty was triggered by fears for
the future of U.S. mortgage giants Freddie Mac <FRE.N> and
Fannie Mae <FNM.N>. []
That hit banking sector stocks and reinforced systemic
risks. []
"The rumours are out there in the market that there may be
more regional banks in trouble," said Darren Heathcote at
Investec Australia.
"That's obviously a concern for the market and this has
driven people into more hard asset-based investments like gold."
Gold has risen sharply in other currencies as well as the
U.S. dollar, reinforcing gold's appeal as a hedge. Against the
euro <XAUEUR=R> it hit a 4-month high of 615.80 euros an ounce.
$1,000 AN OUNCE IN SIGHT
Gold hit an all-time high of $1,030.80 back in March in the
wake of the near collapse of Bear Stearns.
The precious metal is also supported by oil above $146 a
barrel as it is seen as a hedge against fuel-led inflation.
Rising geopolitical tensions between Israel and Iran have
helped push crude prices higher, which also supported gold.
"Heightened tensions towards Iran and fears of a meltdown in
U.S. financial markets triggered further flight-to-safety demand
yesterday," TheBullionDesk.com said in a note.
Worries about the U.S. banking system also hit the dollar
which hit an all-time low against the euro of $1.6038, further
boosting gold's credentials as a safe place for investors to
park their funds. []
Dealers await a speech from U.S. Federal Reserve chairman
Ben Bernanke's testimony later on Tuesday for clues to the
future direcction of interest rates in the United States.
The market will also be watching U.S. producer prices and
retail sales data for June.
Silver <XAG=> rose to $19.27/19.34 an ounce from
$19.12/19.18 late in New York on Monday.
Platinum <XPT=> eased to $2,005.00/2,025.00 an ounce from
$2,012.00/2,032.00 while palladium <XPD=> was unchanged at
$448.50/456.50 an ounce.
