* Gold hits record near $1,480/oz, retreats as dollar firms
* Euro zone debt concerns seen as ultimately gold-supportive
* Inflation on the up in China, India
* Silver reaches 31-year high above $42/oz
(Updates prices)
By Jan Harvey
LONDON, April 15 (Reuters) - Gold held near record highs on
Friday as euro zone sovereign debt concerns, worries over
inflation and expectations U.S. interest rates will stay low all
conspired to support the precious metal.
Gold and silver retreated a touch after a decision by rating
agency Moody's to cut Ireland's debt rating to just above junk
pressured the euro, but remain firmly underpinned. Silver is
holding near its earlier 31-year high at $42.64.
Spot gold <XAU=> was at $1,477.50 an ounce at 1117 GMT,
versus $1,472.90 late on Thursday, having earlier hit a record
$1,479.01. Silver <XAG=> was at $42.56 an ounce against $42.08.
U.S. gold futures for June delivery <GCv1> rose $6.20 to
$1,478.60.
The euro fell after Moody's cut Ireland's sovereign rating
and left the outlook negative. Consequent gains in the dollar,
which make assets priced in the unit more expensive for other
currency holders, curbed gold's rise. []
While the initial impact of the move on currencies has taken
some of the wind out of gold's sails, euro zone debt fears are
likely to support prices in the long run. []
"The market has been reacting to (the credit issues in
peripheral Europe) by looking for ways to protect themselves
from these types of risks, and gold is seen as a way to do
that," said Deutsche Bank analyst Daniel Brebner.
He said the main impact on gold of elevated debt levels in
Portugal, Greece, Ireland and Spain came from the ways in which
euro zone authorities addressed the issue.
"Do we see a bailout, do we see more money being extended
into these countries, do we see monetary accommodation remaining
very much the bias in Europe?" he said. "If that's the case,
that should be very supportive of gold markets."
European shares dipped after the downgrade, while the cost
of insuring against a default by Greece and Ireland rose on
growing speculation Greece will eventually have to restructure
its debt and after the Moody's downgrade. [] []
DEVELOPING WORLD INFLATION RISES
China and India reported higher-than-expected inflation
readings on Friday, giving fresh ammunition to central bankers
and investors alike who are worried about mounting price
pressures in the global economy. []
Gold, which is often seen as a hedge against inflation,
would likely benefit if inflation pressures rise significantly.
Among other commodities, oil prices eased as the dollar
firmed, although they remain near multi-year highs as fighting
in Libya continues, supporting fears output could be hit.
Stronger oil prices also tend to benefit gold prices. []
Goldman Sachs recommended investors go underweight
commodities over a three to six month horizon, echoing its call
from Monday, saying oil prices are higher than justified by
current supply and demand. []
But gold prices look set to remain firmly underpinned.
"The bullion market has found support one day from economic
uncertainty and changes in risk sentiment, and on another day by
high oil and food prices, and on yet another by sovereign risk
and fiscal concerns," said HSBC analyst Jim Steel in a note.
Elsewhere, shares in some North American silver miners fell
sharply overnight after Bolivia's leftist government said it
might rescind concessions on four mines in the country run by
Glencore International Ltd [] affiliates and Canada's Pan
American Silver Corp <PAA.TO><PAAS.O>. []
Bolivia was the world's sixth-largest primary silver
producer last year, metals consultancy GFMS said in a report,
with output of 41 tonnes.
Among other precious metals, platinum <XPT=> was at
$1,789.49 an ounce against $1,786.49, while palladium <XPD=> was
at $769.28 against $760.63.
(Reporting by Jan Harvey; editing by Keiron Henderson)
