* Gold market turns higher as dollar weakens
* Investors watch for violence in Saudi Arabia, Libya
* Increased damage from Japan quake draws some safety buys
* U.S. Feb retail sales rise 1 percent
(Rewrites and adds New York comment, updates prices. Adds
NEW YORK byline/dateline)
By Carole Vaporean and Rebekah Curtis
NEW YORK/LONDON, March 11 (Reuters) - Gold turned higher on
Friday after the dollar weakened against the euro and as
investors sought the precious metal's safety after Japan's
earthquake and with Middle East violence rising heading into
the weekend.
A major earthquake in Japan proved a double-edged sword for
gold prices. While investors wanted a tangible asset amid the
chaos wreaked by the worst earthquake in Japan, the disaster
also hit oil prices, which lessened the need for gold as a
hedge against inflation.
The massive quake pushed U.S. crude prices below $100 a
barrel after a 10-meter tsunami shut down dozens of plants in
the world's third-largest oil consumer. []
But, once the euro extended gains against the U.S. dollar
in a short-squeeze play [], precious metals investors
rushed back in the market to assure they were not left behind
if prices should continue climbing over the weekend.
Spot gold <XAU=> rose to $1,424.05 an ounce by 1:43 p.m.
EST (1843 GMT), up from $1,412.59 late in New York on
Thursday.
"With the weakness in the dollar now and a lot of the
anxiety going into the weekend, I think people want to hold
something tangible in their portfolio," said Senior Market
Strategist Adam Klopfenstein at Lind-Waldock in Chicago.
He added that the flare ups in North Africa and the Middle
East investors "are looking to precious metals for that anxiety
premium, fearing that if they're not long (gold) now they would
have to pay a significantly higher price to buy it on Monday."
The biggest earthquake to hit Japan since records began 140
years ago struck the northeast coast, triggering a tsunami that
swept away everything in its path. Latest, estimates the death
toll to exceed 1,000 people. []
"The earthquake will act as a blow to (Japan's) growth in
the short term, because it will be a drag on the economy," said
Robin Bhar, an analyst at Credit Agricole Bhar added.
Also keeping markets nervy, police flooded the streets of
the Saudi capital on Friday to deter a planned demonstrations
inspired by pan-Arab revolt, but a small Shi'ite protest was
reported in the country's oil-producing east. []
Meanwhile, in Libya forces loyal to leader Muammar Gaddafi
intensified a counter-offensive against insurgents.
[]
But the metal was down about $30 from a lifetime high of
$1,444.40 a troy ounce on Monday.
Prices at 12:56 p.m. EST (1856 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1423.00 10.50 0.7% 0.1%
US silver <SIK1> 36.015 0.949 2.7% 16.4%
US platinum <PLJ1> 1784.40 18.80 1.1% 0.3%
US palladium <PAM1> 765.50 -0.90 -0.1% -4.7%
Gold <XAU=> 1422.40 9.81 0.7% 0.2%
Silver <XAG=> 36.00 0.75 2.1% 16.7%
Platinum <XPT=> 1780.24 20.00 1.1% 0.7%
Palladium <XPD=> 762.00 -3.50 -0.5% -4.7%
Gold Fix <XAUFIX=> 1411.50 1.75 0.1% 0.1%
Silver Fix <XAGFIX=> 34.10 -109.00 -3.1% 11.3%
Platinum Fix <XPTFIX=> 1777.00 9.00 0.5% 2.7%
Palladium Fix <XPDFIX=> 754.00 2.00 0.3% -4.7%
(Reporting by Carole Vaporean; Editing by Lisa Shumaker)
