* New inflows into exchange traded funds lift gold
* Data shows U.S consumer confidence improves
(Updates prices)
By Paul Lauener and Jan Harvey
LONDON, March 13 (Reuters) - Gold firmed on Friday due to
fears that a Swiss example would lead to a series of currency
devaluations and to expectations of rising demand from investors
for the metal.
Spot gold <XAU=> rose slightly to $929.20/930.70 an ounce at
1628 GMT from $926.65 late in New York on Thursday. Earlier it
touched a peak of $938.50.
U.S. stocks [] rose after preliminary March data showed an
unexpected improvement in U.S. consumer confidence, pressuring
gold from its earlier highs. []
But Calyon metals analyst Robin Bhar said news that the
Swiss National Bank had moved to rein in the franc's strength to
boost the economy and news of fresh inflows into exchange-traded
funds (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.
U.S. gold futures for April delivery <GCJ9> on the COMEX
division of the New York Mercantile Exchange rose $4.60 to
$928.70 an ounce.
The precious metal rallied on Thursday after the SNB sold
Swiss francs against the euro, a move that was seen opening the
door to the use of currencies as a policy tool. []
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
part 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.
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
$13.13/13.20 an ounce from $12.94 late on Thursday.
Spot platinum <XPT=> was $1,052.50/1,057.50 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.
(Additional reporting by Pratima Desai; editing by Anthony
Barker)
