* Weak dollar, oil gains, renewed Greek worry help gold
* Silver hits 31-year high above $42 on speculative buying
* Gold gains as Fed officials see no immediate tightening
* Coming up: U.S. March consumer prices on Friday
(Recasts, adds comments, link to graphic; updates market
activity)
By Frank Tang
NEW YORK, April 14 (Reuters) - Gold rose over 1 percent to
a near-record and silver surged on Thursday as dollar weakness,
inflation worries and a European debt crisis powered bullion to
its biggest one-day gain in about seven weeks.
Silver futures soared to their highest since 1980, rising
more than 4 percent for their biggest one-day gain since
November, as strong investment and speculative buying sent the
gold/silver ratio to a low.
Gold received a boost from inflation worries triggered by a
crude oil rally and data showing rising U.S. core producer
prices in March, and as higher-than-expected jobless claims
knocked the dollar. []
"The combination of higher oil prices, weaker dollar and
the resurrection of discussions of Greek sovereign risk
problems has galvanized the gold market. It's particularly
impressive because we ran into selling above the market
yesterday," said James Steel, chief commodity analyst at HSBC.
Spot gold <XAU=> rose 1.4 percent to $1,474.30 an ounce by
4:02 p.m. EDT (2002 GMT), within striking distance of its
record $1,476.21 set on Monday. U.S. gold futures for June
delivery <GCM1> settled up $16.80 at $1,472.40 an ounce.
Investors grew jittery on talk of debt restructuring by
Greece, the first euro zone member to receive a bailout a year
ago in the crisis that has driven Ireland and Portugal to seek
aid and forced draconian budget cuts in Spain. []
The European debt crisis has boosted gold this year and
also helped power the metal's 30 percent gain last year.
Bullion investors took heart as the dollar fell broadly,
reaching a record low against the Swiss franc, with more
weakness likely so long as U.S. Federal Reserve and European
Central Bank policies continue to diverge. []
The recent surge in oil prices is no prelude to broader
price increases that would force the Fed to raise interest
rates, top Fed officials said on Thursday in what appeared to
be the predominant view at the central bank. []
Comments by the Fed officials strengthened expectations the
central bank will stay on course with its $600 billion
debt-buying program and not look to reverse its super-easy
monetary policy any time soon.
Gold prices have almost doubled since the Fed cut interest
rates to the bone in 2008 in an attempt to shock the economy
back to life after the worst financial crisis since the Great
Depression.
SILVER RATIO LOWEST IN NEARLY 3 DECADES
Silver <XAG=> climbed 3.5 percent to $42.03, having hit a
31-year high at $42.07 an ounce. (Factbox: [])
The spread between gold and silver -- showing the relative
strength between the two metals -- has nearly halved since last
August. The gold-to-silver ratio fell to just above 35, the
lowest since the early 1980s.
(Graphic: http://link.reuters.com/cum98r)
"Silver continues to attract a very large speculative bid.
Even though silver is far out-gaining gold, the reasons why
precious metals rally are related to the financial factors that
surround the gold market," said Bill O'Neill, partner at
commodities firm LOGIC Advisors.
Silver has rallied about 35 percent year-to-date on talk of
near-term supply tightness as a recovering global economy
boosts demand for the industrial metal.
"There is still a lot of speculative, investment money
coming into the gold market. Until there is a clear technical
signal that the situation is reversed, the momentum of silver
remains intact," HSBC's Steel said.
Platinum <XPT=> gained 1.2 percent to $1,791.24, while
palladium <XPD=> rose 1.4 percent to $771.50.
Prices at 4:02 p.m. EDT (2002 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCM1> 1472.40 16.80 1.2% 3.6%
US silver <SIK1> 41.664 1.427 0.0% 34.7%
US platinum <PLN1> 1795.60 18.40 1.0% 1.0%
US palladium <PAM1> 774.25 8.95 1.2% -3.6%
Gold <XAU=> 1474.30 19.69 1.4% 3.9%
Silver <XAG=> 42.03 1.41 3.5% 36.2%
Platinum <XPT=> 1791.24 22.09 1.2% 1.3%
Palladium <XPD=> 771.50 10.87 1.4% -3.5%
Gold Fix <XAUFIX=> 1465.75 8.25 0.6% 3.9%
Silver Fix <XAGFIX=> 40.67 45.00 1.1% 32.8%
Platinum Fix <XPTFIX=> 1772.00 12.00 0.7% 2.4%
Palladium Fix <XPDFIX=> 763.00 8.00 1.0% -3.5%
(Additional reporting by Jan Harvey in London; Editing by Dale
Hudson)
