* Expectations for end to QE2 fade after U.S. data
* Dollar slips to fresh 16-month low vs currency basket
* Gold:silver ratio falls to lowest in 28 years
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, April 14 (Reuters) - Gold rose above $1,460 an ounce
in Europe on Thursday and the dollar fell, after data supported
expectations U.S. monetary policy would remain accommodative,
keeping the opportunity cost of holding bullion low.
Spot gold <XAU=> was bid at $1,461.20 an ounce at 0924 GMT,
against $1,454.61 late in New York on Wednesday. Silver <XAG=>
was bid at $40.95 an ounce against $40.62.
Gold hit record highs above $1,476 an ounce earlier this
week, supported by dollar weakness, unrest in the Middle East
and North Africa, and euro zone debt. But U.S. monetary policy
is expected to be the main driver of gold prices this year.
"The investment community is paying more and more attention
to monetary policy in the United States, and what is going to
happen there," said VTB Capital analyst Andrey Kryuchenkov.
"There are very mixed signals... Looking at the gold market,
the end-of-January uptrend held very well, technically we
consolidated above $1,450, which is very strong support, and
with more pressure on the dollar today, we are going higher."
The dollar hit a 16-month low against a currency basket on
Thursday after Wednesday's U.S. retail sales data and the Fed's
Beige Book report did nothing to change the view the central
bank would keep its $600 billion asset buying programme in place
until June. []
Some analysts had suggested that if the economy were doing
significantly better and inflation concerns picking up, the Fed
could rein in its second round of quantitative easing before it
completes at the end of June. Analysts say this is now unlikely.
DEBATE SUBSIDING
"The debate over an early end to QE2 is finally subsiding,
with the chances of an early end rapidly diminishing," said HSBC
analyst James Steel in a note. "This is supportive of gold."
He said his bank's currency strategists believed "the
complacency in the financial markets as regards U.S. interest
rates suggests that rates are likely to "stay lower for longer".
This is also likely to work against the U.S. dollar."
Among other commodities, oil prices steadied at elevated
levels on concern about the impact of high prices on demand,
although continued unrest in the Middle East and a sharp fall in
U.S. gasoline stocks limited losses. []
Leaders of five emerging powers condemned NATO-led air
strikes against Libya after Western and Arab countries issued
their first joint call for Muammar Gaddafi to step down.
[]
Meanwhile, holdings of the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Trust <GLD>, fell by
another 3.3 tonnes on Wednesday, reflecting softer investor
interest in the funds. []
The amount of bullion the trust holds to back its securities
has fallen 67.8 tonnes so far this year, against a rise of 7.4
tonnes in the same period of 2010.
Holdings of the largest silver ETF, the iShares Silver Trust
<SLV.P>, slipped to 10,969.71 tonnes on Wednesday from 11,212.53
tonnes a day before. []
Silver prices remain extremely elevated, however, after
hitting a 31-year high at $41.93 an ounce earlier this week. The
gold:silver ratio fell below 36 for the first time in 28 years.
Among other precious metals, platinum <XPT=> was at
$1,782.50 an ounce against $1,769.15, while palladium <XPD=> was
at $767.50 against $760.63.
(Reporting by Jan Harvey; Editing by Alison Birrane)
