* Gold lifted by weak dollar, oil rally but volume muted
* Bullion put options bid over calls
* Premiums rise for gold bars in Tokyo
* Coming up: G7 finance ministers conference call Friday
(Updates prices, market activity, adds details, graphic)
By Frank Tang
NEW YORK, March 17 (Reuters) - Gold rose on Thursday on a
combination of rallying crude oil, a decline in the dollar and
an inflow into a major exchange-traded fund, with volume capped
on caution over Japan's nuclear crisis.
A wave of cross-asset buying lifted gold. Global equity
markets rebounded after three days of selling despite Japan,
and oil rising more than 3 percent on unrest in the Middle East
and North Africa.
"If more uncertainty does play out in the marketplace, we
may finally see gold catch fire, and if the dollar continues to
fall, I think gold will continue to find support," said Jeffrey
Pritchard, analyst at futures broker Altavest.
Sentiment also improved after data showed U.S. consumer
prices rose at their fastest pace in more than 1-1/2 years in
February, even as most economists agreed inflation pressures
remained generally contained. []
Spot gold <XAU=> rose 0.3 percent to $1,403 an ounce by
3:29 p.m. EDT (1929 GMT).
U.S. gold futures for April <GCJ1> settled up $8.1 at
$1,404.2 an ounce. U.S. COMEX trade was more than halved
Wednesday's volume and one-third lower than its 30-day average,
preliminary Reuters data showed.
Volume is thin as many investors are sidelined on Japan and
are waiting on news ahead of a G7 finance minister meeting on
Friday, said David Lee, precious metals traders of Heraeus
Precious Metals Management.
Spot silver <XAG=> traded in lock-step with gold and later
gained 0.4 percent at $34.32 an ounce, with turnover 50 percent
lower than Wednesday's.
Gold benefited from a weak dollar as the yen hit a record
against the greenback ahead of a conference call by Group of
Seven finance ministers on fears that officials may soon
intervene to rein in the currency's rapid rise. []
GOLD PUT-CALL SKEW
Prices of gold put options were bid over calls, as bullion
investors used a strategy combining options and futures to
protect against downside risk, floor traders said.
(Graphic on gold put/call implied vol:
http://link.reuters.com/rab68r)
"Since we've had such a big move up recently, investors buy
puts and sell calls to lock in what they have," COMEX gold
options floor trader Jonathan Jossen said.
Premiums for gold bars rose to as much as $2 an ounce in
Tokyo, double from earlier this week, as a record-high yen
boosted demand and supply tightened. []
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings edged up to 1,217.295
tonnes by March 16 from 1,212.745 tonnes by March 15, their
lowest since May of last year. []
Platinum and palladium fell as the market fretted about a
loss of demand due to car plant closures in Japan. Platinum and
palladium tumbled to 3-1/2-month lows of $1,654 and $684.50 an
ounce respectively, before turning higher.
Part of the reason for the recovery in the platinum group
metals (PGM) was news on Wednesday that car maker Nissan Motor
<7201.T> said it would restart certain operations.
[]
However, other major auto makers, led by the world's No. 1
Toyota Motor Co <7203.T>, are still shut and may remain so for
some time as they struggled to restart production amid a
shortage of parts and workers. []
Platinum <XPT=> gained 0.7 percent to $1,697.49 an ounce
and palladium <XPD=> rebounded 1.8 percent to $706.98 an
ounce.
Prices at 3:28 p.m. EST (1928 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1404.20 8.10 0.6% -1.2%
US silver <SIK1> 34.258 -0.214 0.0% 10.7%
US platinum <PLJ1> 1706.90 6.40 0.4% -4.0%
US palladium <PAM1> 716.80 11.75 1.7% -10.8%
Gold <XAU=> 1403.00 3.70 0.3% -1.2%
Silver <XAG=> 34.32 0.12 0.4% 11.2%
Platinum <XPT=> 1696.99 10.49 0.6% -4.0%
Palladium <XPD=> 706.97 12.47 1.8% -11.6%
Gold Fix <XAUFIX=> 1403.75 0.25 0.0% -0.5%
Silver Fix <XAGFIX=> 34.47 -26.00 -0.7% 12.5%
Platinum Fix <XPTFIX=> 1697.00 1.00 0.1% -2.0%
Palladium Fix <XPDFIX=> 712.00 4.00 0.6% -10.0%
(Additional reporting by Pratima Desai in London; Editing by
Dale Hudson and Sofina Mirza-Reid)
