* Oil up as violence simmers in Libya, Saudi curbs protests
* Moody's Greece downgrade puts euro zone debt back in focus
* Gold/silver ratio hits 13-year low below 40
(Updates throughout, previous SINGAPORE)
By Jan Harvey
LONDON, March 7 (Reuters) - Gold climbed back towards record
highs in Europe on Monday as the threat of violence spreading in
the Middle East and North Africa pushed oil prices to 2-1/2 year
highs and burnished the metal's safe-haven appeal.
Spot gold <XAU=> was bid at $1,437.15 an ounce at 0927 GMT,
against $1,431.95 late in New York on Friday. U.S. gold futures
for April delivery <GCJ1> rose $9.30 an ounce to $1,437.90.
A downgrade of Greece's credit rating by Moody's also
brought euro zone sovereign debt concerns back into the
spotlight, undermining confidence in the euro. Concerns over
euro zone debt pushed gold sharply higher last year.
"There is all sorts to support gold -- high oil prices, low
real interest rates, and the fact that there are constant
reminders that we still have debt problems in Europe," said
Standard Bank analyst Walter de Wet.
Violence in Libya, where protests over Muammar Gadaffi's
41-year rule are feared to be degenerating into civil war, and
elsewhere in North Africa and the Middle East have boosted
gold's appeal as a haven from risk in recent weeks, sending
prices to a record $1,440.10 an ounce last week.
Troops loyal to Gaddafi have launched counter-offensives
against rebel-held towns, increasing fears that Libya is heading
for a civil war rather than the swift revolutions seen in
Tunisia and Egypt. []
Unrest simmered elsewhere in the region. Saudi security
forces detained at least 22 minority Shi'ites who protested last
week against discrimination, activists said on Sunday, as the
kingdom tried to keep the wave of Arab unrest outside its
borders. []
The news helped lift U.S. crude prices by more than $2 a
barrel to a 30-month high above $106. Saudi Arabia is home to
most of OPEC's spare oil output capacity. []
RISING INFLATION
"The energy complex has not only a high weighting in
commodity price indices, but also in consumer price indices,"
said Peter Fertig, a consultant at Quantitative Commodity
Research. "Therefore, the surge of oil prices will have an
impact on CPI inflation."
"As gold has the reputation to serve as a hedge against
inflation, the fear of rising inflation rates is another factor
supporting gold and other precious metals."
Appetite for gold in Asia remained strong, with Indian gold
futures hitting record highs and the Japanese retail price for
gold hitting a 28-year high above 4,000 yen ($48.60) per gram on
Monday. []
Gold should push higher from its near-record levels due to
its appeal as a safe haven, forecasters told the world's largest
mining conference on Sunday. []
JPMorgan analyst Michael Jansen told the Prospectors and
Developers (PDAC) conference in Toronto that he expects gold
prices to average $1,465 an ounce this year.
Among other precious metals, silver <XAG=> was bid at $36.40
an ounce against $35.61. The metal rose to its highest since
early 1980 in earlier trade at $36.52 an ounce.
The gold/silver ratio meanwhile fell below 40:1 for the
first time since February 1998, demonstrating silver's
outperformance of gold.
"With the situation in the MENA region still extremely
volatile and oil continuing (to) rise, both gold and silver are
likely to extend on a mix of safe-haven and anti-inflationary
hedging," said TheBullionDesk.com analyst James Moore.
Meanwhile platinum <XPT=> was at $1,834.99 an ounce against
$1,841, while palladium <XPD=> was at $811 against $809.50.
(Editing by James Jukwey)
