* Unrest in Yemen, Oman, Libya fuels safe-haven buying
* Middle East, North Africa tensions support oil, hit dollar
* Silver prices set for 19 pct rise in February
(Updates price, adds detail, comment)
By Jan Harvey
LONDON, Feb 28 (Reuters) - Gold rose above $1,410 an ounce
on Monday as turmoil across the Middle East boosted safe-haven
buying, though the metal struggled to sustain gains as investors
were spooked by its proximity to record highs.
Spot gold <XAU=> was bid at $1,410.50 an ounce at 1502 GMT,
against $1,409.15 late in New York on Friday. U.S. gold futures
for April delivery <GCJ1> rose by $1.60 an ounce to $1,410.90.
Unrest across the Middle East and North Africa, which
unseated leaders in Tunisia and Egypt before spreading across
Libya, Bahrain, Yemen and Oman has fuelled a 6 percent rise in
gold prices this month.
Prices are currently on track for their biggest one-month
rise since last August, but analysts say more may be needed to
take gold above its record high at $1,430.95 an ounce.
"It requires some spreading of the political turmoil and an
intensification in those other countries to see gold make much
bigger gains," said Mitsubishi analyst Matthew Turner.
"From a market viewpoint, gold is near its highs again. It
was probably quite easy to get up to $1,400, but it will be more
difficult to rise from here."
Yemen's opposition coalition said on Monday it would not
join a unity government expected to be offered by President Ali
Abdullah Saleh, saying it was standing with popular demands for
an end to his three-decade rule. []
In Oman, protesters demanding jobs and political reforms
blocked roads to a main port in the north of the Gulf Arab
sultanate as looters trashed a nearby supermarket, and
demonstrations spread to the capital. []
In Libya meanwhile, rebels downed a military aircraft as
they fought a government bid to take back the country's third
city, Misrata, a witness said, while foreign ministers discussed
how to help them oust Muammar Gaddafi. []
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DOLLAR UNDER PRESSURE
A decline in the dollar, which makes commodities priced in
the U.S. unit cheaper for holders of other currencies, also
helped support gold.
The dollar hit a 3-1/2-month low versus a currency basket
<.DXY> on speculation the Federal Reserve would lag other
central banks in raising interest rates to counter inflation
risks stoked by rallying oil prices. []
Oil prices edged a touch lower on Monday but remained
elevated after hitting 2-1/2 year highs last week on the back of
tensions across the Middle East and North Africa. []
"Higher oil prices are a double-edged sword as far as gold
is concerned," said UBS in a note. "On the plus side, should
elevated oil prices persist, concerns about a corresponding
negative impact on global economic growth could spurn renewed
interest in safe havens.
"(But) rising oil prices also contribute to higher inflation
prints. This creates a difficult task for policymakers,
particularly the ECB and BoE, who are debating a return to
monetary policy normalisation. The return of interest rate hikes
will act as an anchor for gold at lower price levels."
Among other precious metals, silver <XAG=> was bid at $33.66
an ounce against $33.31. Prices have rallied 19 percent this
month, their biggest one-month rise since May 2009.
Among other precious metals, platinum <XPT=> was at
$1,801.49 an ounce against $1,803.50, while palladium <XPD=> was
at $793.47 against $785.40.
(Reporting by Jan Harvey; Editing by Alison Birrane and Jane
Baird)
