* SPDR ETF overtakes SNB as world's 6th largest gold holder
* Gold seen heading to $930/940 resistance level
* Currency devaluation fears seen boosting gold
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By Paul Lauener and Jan Harvey
LONDON, March 13 (Reuters) - Gold jumped 1 percent on
Friday, reversing earlier losses, as buying on the U.S. market
pushed prices through technical resistance, with ETF buying and
fears of currency devaluation fuelling interest in the metal.
Spot gold <XAU=> climbed to $935.20/936.70 an ounce at 1245
GMT from $926.65 late in New York on Thursday. Earlier it
touched a low of $918.80.
U.S. gold futures for April delivery <GCJ9> on the COMEX
division of the New York Mercantile Exchange rose $11.40 to
$935.40 an ounce.
"Massive futures buying in the U.S. market took out a lot of
stops," said Citigroup analyst David Thurtell.
Calyon metals analyst Robin Bhar said Thursday's
announcement that the Swiss National Bank had moved to devalue
its currency to boost the economy and news of new inflows into
ETFs had fuelled interest in the precious metal.
"Those two pieces of information should allow gold to...
maybe now test the resistance around $930/$940," he said.
The precious metal rallied on Thursday after the SNB sold
Swiss francs against the euro, raising the spectre of a race to
devalue major currencies. []
If other central banks follow the SNB's lead, paper
currencies could suffer, boosting the appeal of gold as an
alternative asset.
"This news could be interpreted as the beginning of a
'devaluation race' in which the stable alternative currency,
gold, is likely to profit most," Commerzbank said in a note.
Interest in gold has also been boosted by news that
holdings of the largest gold ETF, New York's SPDR Gold Trust,
rose 3.36 tonnes on Thursday to a record 1,041.53 tonnes,
overtaking the SNB as the world's sixth-largest holder of gold.
Buying of physical gold to back ETFs has represented a major
tranche of demand in recent months, with a sharp rise in ETF
holdings at the beginning of the year a key factor in gold's
price rally.
HEDGE
On the currency markets, the dollar weakened to a 2-1/2 week
low against the euro.
Although gold and the dollar are currently moving in the
same direction as both react to risk aversion, a weaker dollar
usually boosts gold, which is bought as a hedge against weakness
in the U.S. currency.
If the dollar continued to weaken, it was likely to provide
gold extra support in the medium term, Bhar said.
Elsewhere, China's central bank said in its annual
international financial markets report that gold could be set to
climb to record highs in the context of the financial crisis.
[]
Among other precious metals, spot silver <XAG=> climbed to
$13.19/13.26 an ounce from $12.94 late on Thursday.
Spot platinum <XPT=> was $1,051/1,061 an ounce from
$1,049.50, while spot palladium <XPD=> was a touch firmer at
$196.50/201.50 an ounce, up from its late Thursday New York
quote of $195.
Both metals, which have mainly industrial uses, have
suffered from the economic slowdown, and especially a fall in
demand for cars.
"While the global economic outlook continues to
deteriorate... we believe there are risks in owning platinum at
the moment," UBS strategist John Reade said in a note.
(Editing by Anthony Barker)
