* Investors fret over prospect of Greek debt restructuring
* China reserve requirement hike puts inflation in spotlight
* Silver rallies to fresh 31-year high
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, April 18 (Reuters) - Gold held near record highs on
Monday as worries over the outlook for the euro lifted interest
in the metal as a haven from risk and as a fresh hike in China's
reserve requirements highlighted concerns over inflation.
The dollar's rise versus the euro limited gains, however.
Spot gold <XAU=> rose as high as $1,488.50 and was bid at
$1,484.20 an ounce at 0932 GMT, against $1,483.75 late in New
York on Friday. U.S. gold futures for June delivery <GCv1> eased
$1.10 an ounce to $1,484.90, off a record $1,489.70.
The euro fell 0.8 percent versus the dollar on Monday and
the cost of insuring Greek debt against default rose on concerns
that Greece may have to restructure its debt, and on worries
over the health of Portugal, Ireland and Spain. [] []
The strong showing of an anti-euro party in a Finnish
election on Sunday has heightened the risk of a fresh obstacle
to European Union plans to bail out Portugal and fortify the
euro, analysts said. []
"The ongoing European periphery issues aren't attracting as
strong a reaction from the market as they did originally, but
clearly Spain is the next concern, and that is feeding into
(gold)," said RBS analyst Daniel Major.
"(There was) another increase in the Chinese reserve
requirement ratio over the weekend," he added. "It certainly
looks as though there are signs that inflation is uncomfortably
high within the Asia region. Gold has a role as a perceived
inflation hedge."
China raised banks' required reserves on Sunday for the
fourth time this year, extending the fight against excessive
liquidity and stubbornly high inflation in the world's number
two economy. The move was widely expected. []
European shares also eased as nervousness ahead of key
quarterly earnings results and lingering worries about indebted
euro zone countries lowered investors' risk appetite. []
OIL EASES FROM HIGHS
Meanwhile, oil retreated on fears that high prices were
hurting demand, after main oil exporter Saudi Arabia said the
market was over-supplied, when announcing a cut in output. []
Crude oil remains near multi-year highs, however, supported
by unrest in the Middle East and North Africa. Elevated oil
prices tend to support gold, which is often seen as a hedge
against oil-led inflation.
"Gold prices are more sensitive to commodity price movements
than to broader inflation," said HSBC analyst James Steel in a
note. "The recent gains in inflation across the OECD and
emerging world are in those categories -- food and fuel -- that
gold is most likely to react positively to."
Among other precious metals, silver <XAG=> was bid at $42.88
an ounce against $42.99, having earlier touched a new 31-year
high at $43.35 an ounce. Silver has been the best-performing
precious metal so far this year, up 39 percent since January.
However, analysts fear the metal, which has benefited from
strong investment flows and perceptions that recovering
industrial demand will put a floor in prices, is overpriced at
current levels.
"When we were visiting U.S. clients at the beginning of
March, the bullish mood towards silver was very evident," said
UBS in a note. "Now, caution and confusion abound."
"While everyone can understand silver's direction, no-one
really grasps the extent of the move. The consensus opinion is
that silver has outpaced logic and a correction is overdue. Last
week clients started to bank profits and explore downside
protection strategies."
Holdings of the world's largest silver exchange-traded fund,
the iShares Silver Trust <SLV>, rose by 69.81 tonnes, or 0.64
percent, on Friday to 11,044.07 tonnes. []
Platinum <XPT=> was at $1,781.40 an ounce against $1,782.70,
while palladium <XPD=> was at $760.72 against $760.55.
(Reporting by Jan Harvey; Editing by Alison Birrane)
