* Gold climbs, silver hits 31-yr high as risk appetite wanes
* Resignation of Portugal's PM underlines euro zone concerns
* Violence persists in Libya, further clashes seen in Yemen
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 24 (Reuters) - Gold and silver prices rose on
Thursday as the resignation of Portugal's prime minister ahead
of a summit of EU leaders on the European economy this week
revived jitters over the euro zone sovereign debt crisis.
Fresh concerns over the health of the bloc have conspired
with violence in the Middle East and worries over radiation
leaks in Japan to blunt risk appetite, pushing gold prices back
towards record highs and silver to a 31-year peak.
Spot gold <XAU=> was bid at $1,438.40 an ounce at 1334 GMT,
against $1,436.20 late in New York on Wednesday. U.S. gold
futures for April delivery <GCJ1> rose $1.00 an ounce to
$1,439.00. Silver <XAG=> was at $37.64 an ounce against $37.36.
"The gold price is currently supported by safe haven demand,
stemming from three current crises - Libya and more generally
unrest in the Middle East/North Africa region, Japan and renewed
concerns over the periphery of Europe, particularly Ireland and
Portugal," said BNP Paribas analyst Anne-Laure Tremblay.
Concern over the indebtedness of some smaller euro zone
members returned to the spotlight on Thursday after Portuguese
prime minister Jose Socrates resigned, a move set to dominate a
summit of EU leaders starting Thursday. []
Socrates quit after parliament rejected his government's
latest austerity measures aimed at avoiding EU financial
assistance. Lisbon needs to refinance 4.5 billion euros of
sovereign debt in April.
The return to prominence of euro zone sovereign debt fears,
a key factor pushing gold prices to record levels last year, has
given a fresh boost to both silver and gold on Thursday.
"The return of European sovereign issues to the spotlight,
with expectations high for an imminent Portuguese bailout, has
pushed gold to within a couple of dollars of its March 7 record
high of $1,444," said UBS analyst Edel Tully in a note.
"Press releases yesterday suggesting the lack of a
comprehensive 'grand bargain' package from the EU Summit until
June at least have also helped silver trade to a 31-year high."
OIL EXTENDS GAINS
U.S. oil prices surrendered gains on Thursday after softer
than expected U.S. durable goods numbers, breaking a winning
streak that had seen them rise back above $106 a barrel. []
Gold pared gains as oil slipped. The metal tends to benefit
from higher oil prices, both because it is sometimes seen as a
hedge against oil-led inflation, and because it is often traded
as part of a commodity basket dominated by crude oil.
Western warplanes hit Libya for a fifth night, but so far
have failed to stop Muammar Gaddafi's tanks shelling rebel-held
towns, while other clashes have occured in Yemen and Syria in
recent days. [] [] []
"Given the geopolitical environment, concerns about Portugal
and other peripheral countries, euro zone debt concerns and the
still extremely low interest rate environment, it is not
surprising the trend is your friend," said Commerzbank analyst
Eugen Weinberg.
Concerns persisted in Tokyo over radiation leaking from a
nuclear plant crippled in the earthquake and tsunami that hit
northeast Japan earlier this month.
SolarWorld <SWVG.DE>, Germany's No.2 solar company by market
value, sees higher sales this year and next, taking heart from a
boost to the renewable industry following Japan's nuclear
crisis. []
Silver use in the fabrication of photovoltaic, or solar,
cells has grown rapidly in recent years and is set for further
expansion, metals consultancy GFMS said in its latest industry
report on the metal for the Silver Institute.
Platinum <XPT=> was at $1,752.74 an ounce against $1,751.81,
while palladium <XPD=> was at $749.50 against $745.69.
(Reporting by Jan Harvey; Editing by William Hardy)
