* China raises reserve rate requirements
* Brent crude oil <LCOc1> falls, near $114 a barrel
* Investors nervous about violence in Bahrain
(Updates prices, adds comment and detail)
By Rebekah Curtis
LONDON, March 18 (Reuters) - Gold pared gains on Friday as
Libya's declaration of a ceasefire soothed some financial market
jitters and hit oil prices, while investors also looked to an
intervention in the yen as a move that could calm markets.
But bullion remained underpinned by market uncertainty as
France said it was still cautious about the ceasefire and as
Britain prepared warplanes for action. []
Gold was at $1,418.07 an ounce at 1306 GMT from $1,402.40
late in New York on Thursday. Earlier the metal was little
changed after news China's central bank would raise lenders'
required reserves by 50 basis points. []
Muammar Gaddafi's government declared a ceasefire to protect
civilians and comply with a United Nations resolution passed
overnight, Libyan Foreign Minister Moussa Koussa said.
Gold earlier hit a session high of $1,423.70 an ounce,
supported by the United Nation's approval of military action to
contain Gaddafi, while unrest in Bahrain has also unnerved
investors. [] []
"If that (the ceasefire) actually stands and is sustained,
then concerns soften in regard to the wider implications for the
whole region," said Carl Firman, an analyst at Virtual Metals.
"If the MENA (Middle East and North Africa) region
stabilises ... we'll see confidence return," he added.
A weaker U.S. dollar against a basket of currencies also
supported dollar-priced gold.
GLOBAL UNCERTAINTY
Japan's battle with a nuclear crisis after Friday's
earthquake and tsunami has also shaken confidence in global
markets this week. <nTOPNOW4>
"The uncertainty across the different global centres is
still there, and that should support precious metals," said Saxo
Bank analyst Ole Hansen.
In the wake of the crisis, Japan bought billions of dollars
to restrain a soaring yen, and traders reported intervention by
European central banks, kicking off joint action by the world's
richest nations to calm markets. []
In recent sessions risk aversion mounted to such heights
that even gold, traditionally a safe haven from risk, was no
exception to the broad sell-off as investors sold the metal to
cover losses elsewhere.
"When everything turns into risk (aversion) mode, no one
stays clear of that and the same thing happened for precious
metals," Hansen said.
But potential stability in the yen may soothe investors.
"The yen probably holds the key now," Hansen added. "If they
manage to keep the yen at these levels, that could help
stabilise the markets in general and also gold."
Curbing investors' flight to gold as a safe haven from
inflationary pressures, Brent crude oil prices reversed earlier
gains to trade near $114 an ounce after the ceasefire
announcement. []
Inflation watchers also kept an eye on China, where the
central bank announced it would raise lenders' required reserves
for the third time this year and the sixth since November.
[] []
The move increases the required reserve ratio for the
country's biggest banks to a record 20.0 percent, another step
in the government's campaign to control inflation.
Joining the rally, spot silver <XAG=> was at $34.90 an ounce
from $34.18, but it came off a session high of $35.36.
Platinum <XPT=> was at $1,711.49 an ounce from $1,697.49 and
palladium <XPD=> traded at $722.22 an ounce from $704.50.
(Editing by James Jukwey and Jane Baird)
