* Gold <XAU=> at highest level since March 7
* Silver <XAG=> at highest since 1980
* New U.S. single-family home sales hit record low
(Adds comment/detail, updates prices)
By Pratima Desai and Rebekah Curtis
LONDON, March 23 (Reuters) - Gold on Wednesday hit its
highest since early March and silver struck a 31-year peak as
investors sheltered in precious metals from weak data, Middle
East unrest and a key vote threatening Portugal's government.
Spot gold <XAU=> was bid at $1,439.44 a troy ounce at 1507
GMT from $1,429.50 late in New York on Tuesday. The precious
metal hit a session high of $1,440.90, its highest since March 7
when it scored a record peak of $1,444.40 an ounce.
Tracking bullion, spot silver <XAG=> hit a session high of
$36.85 an ounce, its highest since 1980.
"As long as we still have all this uncertainty it lends good
support to the gold story," Saxo Bank senior manager Ole Hansen
said as oil prices stayed high, fighting in Libya escalated and
unrest simmered across the Middle East. <nTOPMEAST>
"There is a chance now that we could move to the $1,450
level," he added.
Weak economic data boosted investors' flight to gold as a
safe haven from risk. Figures showed new U.S. single-family home
sales unexpectedly fell in February to hit a record low and that
euro zone consumer confidence declined in March. []
[]
The latest flurry of gold purchases was also bolstered by
the expectation Portugal's parliament would reject the
government's latest austerity measures, setting the stage for
the possible collapse of the minority Socialist administration
ahead of a European summit. []
Also hitting risk appetite, European Union leaders are set
to delay a decision on how to strengthen their multi-billion
euro rescue fund beyond the summit this week. []
"Today there is focus on Portugal. There are debt problems
more generally in the western world and of course we should not
forget the Middle East, which also leads to safe-haven flows,"
said Christin Tuxen, analyst at Danske Bank.
"Longer term, the fact that interest rates are on the rise
generally will make the opportunity cost of investing in gold
higher, making it less attractive."
OIL SUPPLY
Conflict in the Middle East has helped gold market sentiment
and boosted oil prices because of worries about supply
disruptions in the region. [] []
Gold is used as a hedge against inflationary pressures,
often triggered by rising oil prices. Brent crude oil <LCOc1>
dipped slightly but, at $115 a barrel, was nearing recent 2-1/2
year highs of around $120.
Forecasts of stronger industrial demand have helped silver
prices climb. Spot silver was bid at $36.81 an ounce from $36.34
late on Tuesday.
"While many market participants are impressed by silver's
industrial and retail demand, and are concerned about physical
shortages, another portion believe there is too much speculative
noise in the market right now," UBS said in a note.
Platinum <XPT=> was bid at $1,745.5 an ounce from $1,732.00
and palladium <XPD=> at $738.65 from $733.00.
Both platinum and palladium are used in autocatalysts and
have come under pressure since Japan's March 11 earthquake and
tsunami shut car factories in Japan.
Toyota Motor Co <7203.T> has halted operations at its 12
main assembly plants in Japan until at least Saturday, which
will result in lost production of 140,000 vehicles.
[]
"Japan accounted for 15 percent of global platinum
consumption last year, and demand in the short term will be
weaker following the closure of industry after the
earthquake/tsunami," Credit Agricole said in a note.
"Any disruptions to the supply of key components imported
from Japan would also affect industrial production/manufacturing
activity in other parts of the world."
(Reporting by Pratima Desai and Rebekah Curtis; editing by
Keiron Henderson)
