* Gold pares gains after falling in tandem with oil
* Prospect of monetary tightening seen in euro zone, U.S.
* Gold/silver ratio drops below 38, lowest since 1983
(Rewrites, updates with comments, market activity, adds links
to graphics and NEW YORK dateline/byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 30 (Reuters) - Gold prices pared
gains on Wednesday as the metal struggled to rise toward
all-time highs, weighed down by profit taking amid an initial
decline in crude oil prices and technical weakness.
Bullion, which has dropped in each of the past four
sessions, was also pressured by signs of monetary tightening by
the U.S. Federal Reserve and the European Central Bank and
nervousness ahead of Friday's U.S. nonfarm payroll report.
"Some investors may have been spooked by oil's decline and
liquidated their positions in gold, as they have been trading
oil and gold in pairs," said Phillip Streible, senior market
strategist with MF Global's Lind Waldock unit.
Earlier in the session, gold and oil fell sharply in tandem
after data showed swelling crude inventories. However, gold
remained about $10 below its session high even as U.S. crude
futures recouped most of their losses.
(Graphic: http://link.reuters.com/wyr78r)
Spot gold <XAU=> gained 0.2 percent to $1,418.65 an ounce
by 12:05 p.m. EDT (1605 GMT), having earlier touched a high of
$1,430. U.S. gold futures for April delivery <GCJ1> rose 0.2
percent to $1,418.80.
Bullion's failure to capitalize on new record highs on
recent strong volume suggested some investors are skeptical
about the metal's investment appeal, analysts said.
A Reuters poll showed that gold's decade-long price rally,
which took the metal to record highs last week, looks set to
plateau in the second quarter as more downside risks for
bullion emerge. []
(Graphic: http://r.reuters.com/ruq78r)
Silver <XAG=> climbed 0.6 percent to $37.30 an ounce,
sending the gold/silver ratio to below 38, the lowest level
since 1983.
(Graphic: http://link.reuters.com/bas78r)
"Recent (silver) trading has been driven also by technical
and momentum trading, rather than the fundamentals," said
Daniel Major, an analyst at RBS.
Industrial demand for silver is set to rise to 665.9
million ounces by 2015 from $487.4 million ounces last year,
metals consultancy GFMS said in a report prepared in
conjunction with the Silver Institute. []
MONETARY TIGHTENING IN FOCUS
Bullion hit a record $1,447.40 an ounce last week, after
months of unrest across North Africa and the Middle East, with
violence continuing to simmer in Libya, Bahrain, Syria and
Yemen. []
While this is limiting any correction in the gold price,
the precious metal has struggled to eke out fresh gains as
financial markets digest hints from the euro zone and U.S.
authorities they may be set to tighten historically loose
monetary policy.
"Gold players are anxiously waiting for policy signals from
the U.S. and to see what the ECB (European Central Bank)
actually does next week in its monthly meeting," said Credit
Agricole analyst Robin Bhar.
"It would take an extraordinary event for the ECB not to
hike, and in the U.S. tightening rather than keeping this
accommodative bias (is likely). Those two factors do put a
non-interest bearing asset like gold at a disadvantage."
Platinum <XPT=> gained 1.3 percent to $1,757.60 an ounce,
while palladium <XPD=> was flat at $748.50.
Prices at 12:05 p.m. EDT (1605 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1418.80 2.60 0.2% -0.2%
US silver <SIK1> 37.340 0.353 1.0% 20.7%
US platinum <PLN1> 1767.00 22.90 1.4% -0.6%
US palladium <PAM1> 753.75 0.80 0.1% -6.2%
Gold <XAU=> 1418.65 2.70 0.2% -0.1%
Silver <XAG=> 37.30 0.23 0.6% 20.9%
Platinum <XPT=> 1757.60 23.15 1.3% -0.6%
Palladium <XPD=> 748.50 0.22 0.0% -6.4%
Gold Fix <XAUFIX=> 1425.50 6.50 0.5% 1.1%
Silver Fix <XAGFIX=> 37.53 91.00 2.5% 22.5%
Platinum Fix <XPTFIX=> 1760.00 8.00 0.5% 1.7%
Palladium Fix <XPDFIX=> 757.00 1.00 0.1% -4.3%
(Editing by Walter Bagley)
