* Investment demand, safe-haven appeal boost gold
* Barrick completes hedge book elimination
* SPDR gold ETF holdings rise more than 2 tonnes
(Recasts, updates prices, market activity, to close; adds
second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Dec 1 (Reuters) - Gold hit record highs
above $1,200 an ounce on Tuesday as investors bought the
precious metal as an alternative investment amid dollar
weakness and economic uncertainty after the Dubai credit woes.
Strength in gold lifted other precious metals, with silver
and palladium rallying to their strongest level since July
2008, and platinum hitting its highest since August last year.
Bullion has risen 15 percent since the start of November.
So far this year it has gained 36 percent on a combination of
worries about paper currency depreciation, inflation and doubts
about a nascent economic recovery.
"It is like a perfect storm for gold, with the currency
situation, and with Dubai rekindled the concerns about economic
crisis," said Bill O'Neill, partner of LOGIC Advisors.
Spot gold <XAU=> hit a record of $1,201.40 an ounce, and
was at $1,195.50 an ounce at 3:38 p.m. EST (2038 GMT), against
$1,179.10 late in New York on Monday.
U.S. February gold <GCG0> settled up $17.90, or 1.5
percent, at $1,200.20 an ounce on the COMEX division of NYMEX.
The dollar fell against a basket of six other currencies
<.DXY> on Tuesday as waning worries about Dubai's debt,
Australia's interest rate hike, and upbeat euro zone data
dimmed the greenback's safe-haven appeal. []
Weakness in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Ole Hansen, senior manager at Saxo Bank, said investors had
been encouraged by the strength of gold's recovery after it
fell below $1,140 an ounce last week, with the fall being met
with strong fund buying.
"Everyone was waiting for that correction, and the way gold
recovered suggested there was a lot of buying lurking in the
wings (among) people who missed the opportunity to get into the
market in the first place," said Hansen.
Significant downside risks to the price were unlikely to be
seen before January, said Michael Lewis, head of commodities
research at Deutsche Bank, with seasonal factors affecting the
dollar likely to drive gold higher in the short term.
BARRICK COMPLETES DE-HEDGING
The world's biggest gold miner, Barrick Gold Corp <ABX.TO>,
said it had completed the elimination of all of its gold hedges
as planned. De-hedging has represented a significant source of
demand in recent years. []
In the physical market, the largest gold exchange-traded
fund, the SPDR Gold Trust <GLD>, said its holdings rose 2.134
tonnes to nearly 1,130 tonnes on Monday. []
Analysts said the gold market should keep finding support
from fund and investment demand along with buying from central
banks.
News in early November that India's central bank had bought
200 tonnes of gold, followed by acquisitions by Russia, Sri
Lanka and Mauritius, sparked a 13 percent price rise that
month.
Among other precious metals, spot silver <XAG=> was at
$19.03 an ounce against $18.45, having earlier hit a high of
$19.24, its highest price since July 2008. Platinum <XPT=> was
at $1,476 an ounce against $1,452.
Palladium <XPD=> meanwhile rose 5 percent to its highest
level since July 2008 at $384 an ounce, and was last at
$378.50, against $363.50. Dollar weakness and gains in other
precious metals are lifting investment interest in palladium.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCG0> 1200.20 17.9 1.5 884.3 35.7
US silver <SIH0> 19.210 0.685 3.7 11.295 70.1
US platinum <PLF0> 1486.60 26.40 1.8 941.50 57.9
US palladium <PAH0> 383.95 17.75 4.8 188.70 103.5
Prices at 3:42 p.m. EST (2042 GMT)
Gold <XAU=> 1195.35 16.25 1.4 878.20 36.1
Silver <XAG=> 19.03 0.58 3.1 11.30 68.4
Platinum <XPT=> 1477.50 25.50 1.8 924.50 59.8
Palladium <XPD=> 378.50 15.000 4.1 184.50 105.1
Gold Fix <XAUFIX=> 1192.50 -1.00 -0.1 836.50 42.6
Silver Fix <XAGFIX=> 18.72 58.00 3.2 14.76 26.8
Platinum Fix <XPTFIX=> 1470.00 2.00 0.1 1529 -3.9
Palladium Fix<XPDFIX=> 380.00 1.00 0.3 365.0 4.1
(Reporting by Frank Tang; Editing by David Gregorio)
((frank.tang@thomsonreuters.com; +1 646 223 6126;
Reuters Messaging: frank.tang.reuters.com@reuters.net))
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