* Dollar slides to 1-year low vs euro as sentiment improves
* SPDR gold ETF reports fresh 7.628-tonne inflows
* Silver, platinum, palladium hit multi-month highs
(Updates throughout, changes dateline from TOKYO)
By Jan Harvey
LONDON, Sept 17 (Reuters) - Gold prices hit 18-month highs
for a second consecutive session on Thursday as the dollar slid
to one-year lows versus the euro, fuelling buying of the
precious metal as an alternative asset.
Traders said if dollar weakness persisted, the precious
metal's previous record high of $1,030.80 an ounce was likely to
fall, despite a lack of physical buying and slower demand for
gold-backed exchange-traded funds.
Spot gold <XAU=> rose to $1,020.55 an ounce at 0932 GMT from
$1,016.70 late in New York on Wednesday. U.S. gold futures for
December delivery <GCZ9> on the COMEX division of the New York
Mercantile Exchange rose $2.40 to $1,022.40 an ounce.
Industrial precious metals platinum, palladium and silver
also rose, benefitting from a better outlook for industrial
production. Platinum and palladium hit their best levels since
September 2008, while silver reached a 13-month peak.
Commerzbank analyst Eugen Weinberg said as long as dollar
weakness persisted, gold's run higher was likely to continue.
"It is realistic that we will see (the record high) in the
course of the next couple of days, and should that fall,
probably even more speculative money will flow into the market,"
he said. "Momentum is very strong and positive."
However, given the weakness in underlying demand for the
metal and rising scrap levels, the rally may not ultimately be
sustainable, he said.
The dollar hit a one-year low versus the euro <EUR=> on
Thursday, while the dollar index <.DXY>, which measures the U.S.
unit's performance versus major six currencies, fell 0.20
percent. []
Renewed optimism over the economic outlook after better than
expected data from Japan and the United States boosted interest
in assets seen as higher-risk, like commodities, equities and
higher-yielding currencies.
Asian stocks hit their highest level in 13 months, while
European shares rose in early trade. [] []
INFLOWS RESUME
Exchange-traded funds bought more gold on Wednesday, with
the largest, New York's SPDR Gold Trust <GLD>, reporting inflows
of 7.628 tonnes. The trust is the world's sixth biggest holder
of gold, according to World Gold Council statistics. []
London's ETF Securities reported inflows of just over 12,000
ounces into its three gold-backed products on Wednesday.
ETF buying was a key factor driving gold above $1,000 an
ounce in the first quarter of 2009, but inflows have tailed off
sharply since then and, while firmer, remain comparatively soft.
Among other precious metals, silver <XAG=> rallied to a
13-month high of $17.63, benefiting from a firmer tone to base
metals. Silver is widely used in industries such as electronics
manufacturing, as well as being an investment metal. []
Silver represented increasingly good value to gold as the
rally continued, with the gold to silver ratio falling to 58.4
from around 64.5 a month ago.
"Silver and platinum are getting a leg up not just from gold
but from the improving industrial production outlook, so they
have done even better than gold," Citigroup analyst David
Thurtell told Reuters Television.
"The gold-silver ratio can push even further down, probably
into the low 50s from the high 50s now."
Spot silver <XAG=> was bid at $17.51 an ounce against
$17.35 on Wednesday.
Platinum <XPT=>, chiefly used in car manufacturing as an
autocatalyst, built on recent gains to reach a one-year high of
$1,348 an ounce.
ETF Securities said it saw an inflow of more than 8,500
ounces into its platinum-backed ETC <PHPT.L> on Wednesday.
Spot platinum <XPT=> was at $1,342 an ounce against
$1,344.50, while palladium <XPD=> was at $300 against $296, a
12-month high.
(Additional reporting by Jane Grieve; Editing by William
Hardy)
