* Bullion prices hit highest since July 22
* Gold hits record in many currencies including euro
* Russian central bank says plans to continue buying gold
(Updates prices)
By Jan Harvey
LONDON, Feb 17 (Reuters) - Gold hit a fresh seven-month high
on Tuesday after weaker-than-expected U.S. manufacturing data
fuelled fears over the economic outlook, boosting investment in
bullion as a safe store of value.
Fears over a deepening recession in eastern Europe earlier
in the session sent the metal to record highs in a raft of
currencies -- including the euro, sterling, the South African
rand, the Indian rupee and the Canadian and Australian dollars.
Spot gold <XAU=> rose to $966.15/968.15 an ounce at 1534 GMT
from $940.90 in New York late on Monday. Earlier it touched a
high of $970.90 an ounce, its firmest since July 22.
U.S. gold futures for April delivery <GCJ9> on the COMEX
division of the New York Mercantile Exchange rose $26.90 to
$966.50 an ounce, having earlier touched a high of $968.40.
"We are seeing complete risk aversion, with equities selling
off and the dollar rising," said VTB Capital analyst Andrey
Kryuchenkov. "Investment demand is rising for gold."
Fears over the outlook for the economy worsened after a
survey showed manufacturing production in New York State fell to
a record low in February. []
Wall Street stocks tumbled on concern the recession is
worsening, taking the benchmark S&P 500 below the 800 level for
the first time since Nov 21. []
This added to gloom caused by credit rating agency Moody's
statement that the recession in eastern Europe is likely to be
more severe than elsewhere and would pressure financial strength
ratings of local banks and their Western parents. []
Such fears are boosting gold, analysts said.
"Gold is the asset of choice right now and given renewed
concerns about eastern Europe and (with the) banking sector
again under pressure, investors are looking at gold, said James
Moore, an analyst at The BullionDesk.com.
While investment in products like gold-backed exchange
traded funds has soared as investors seek a safe place for their
cash, high prices are hurting jewellery demand in key centres of
gold buying, India, China and the Middle East.
The benchmark April gold contract <MAUJ9> traded in India
peaked at 15,379 rupees per 10 grams, boosted by safe haven
buying and a weak rupee.
CRUDE
Gold shrugged off moves in its usual external drivers, crude
oil and the dollar. The dollar, which normally moves in the
opposite direction to gold, rose to a two and a half month high
versus the euro, also benefiting from rising risk aversion.
[]
Oil prices fell more than 6 percent as bleak economic
indicators in Asia turned attention back to the demand slump.
[]
Elsewhere Alexei Ulyukayev, deputy chairman of Russia's
central bank, told Reuters the bank had increased gold's share
of its reserves, and planned to continue doing so this year. "We
are buying gold," he said. []
UBS strategist John Reade said he expected the bank would
make purchases from domestic producers.
"We expect slow and steady accumulation from the CBR in
coming years and do not expect Russia to start buying gold in
the international OTC market," he said.
Among other precious metals, spot silver <XAG=> climbed to a
six month high of $14.07 an ounce, and was later quoted at
$13.97/14.05 an ounce from $13.57.
Spot platinum <XPT=> edged up to $1,082/1,087 an ounce from
$1,063. The fundamentals for the metal remain weak, with demand
from carmakers -- the major users of the platinum group metals
-- severely hit by the recession in the United States.
Spot palladium <XPD=> hit a three-month high of $218.50 an
ounce, before easing back to $216/220 an ounce from $213.50.
The metal has been supported by buying for palladium-backed
ETFs, on the perception that the metal is cheap compared to its
peers.
(Editing by Guy Dresser)
