* Bernanke interview raises prospect of further U.S. easing
* Euro zone debt fears run high ahead of Brussels meeting
* Palladium ETFs seeing strong inflows, analysts say
(Updates prices)
By Jan Harvey
LONDON, Dec 6 (Reuters) - Gold held near its highest since
mid-November on Monday as speculation U.S. authorities will have
to further extend monetary easing and concerns over euro zone
debt boosted interest in the metal as a haven from risk.
While strength in the U.S. unit kept a lid on gains in
dollar-priced gold, gold priced in sterling hit record highs and
Japanese yen-denominated bullion reached its highest since early
1983 as risk aversion stoked broad-based gains in the metal.
Spot gold <XAU=> was bid at $1,414.05 an ounce at 1211 GMT,
against $1,414.35 late in New York on Friday. U.S. gold futures
for December delivery <GCZ0> rose $6.80 an ounce to $1,412.20.
Sterling-priced gold <XAUGBP=R> reached a record 902.47
pounds ($1,414) an ounce, while gold denominated in yen
<XAUJPY=R> hit its highest since Feb. 1983 at 117,541 yen
($1,418) an ounce.
Fresh concerns emerged over the stability of the foreign
exchange markets after Federal Reserve Chair Ben Bernanke said
on Sunday the bank could buy more than the $600 billion in U.S.
government bonds it has committed to purchase. []
If the Fed extends its quantitative easing policy, further
undermining the dollar, it could lead to fresh buying of gold as
an alternative to fiat currencies. This added to the momementum
gold picked up last week on worries over euro zone debt levels.
"Bernanke...talked about QE3, and that is fuelling
safe-haven demand," said Credit Agricole analyst Robin Bhar.
"The euro zone crisis hasn't gone away. We may hear more on that
with the eurogroup meeting today in Brussels.
"With all these broader-based fears about currency
debasement and the U.S. doing more money printing... gold, like
Treasuries, like the dollar from time to time, will be the
beneficiary of those safe-haven flows."
The dollar later rebounded to trade nearly 1 percent up on
the euro <EUR=> as the single currency was battered by debt
concerns ahead of a euro zone finance ministers' meeting.
While strength in the dollar is limiting spot gold's gains
for the moment, concerns over the outlook for both currencies
are keeping the precious metal firmly underpinned.
"While lingering concerns over euro zone debt issues
maintain safe-haven buying, the potential for a longer than
expected period of expansionary monetary policy in the U.S. and
Europe is prolonging the precious metals bull market," said
Morgan Stanley in a note.
EUROGROUP MEETING EYED
All eyes are now on the outcome of Monday's meeting of euro
zone finance ministers in Brussels. They face pressure to
increase the size of a 750 billion euro ($995 billion) billion)
safety net for debt-stricken members. []
Trading of sovereign bonds from countries such as Portugal
and Spain was subdued pending the outcome of the meeting, with
the region's debt crisis still occupying centre stage. []
On the investment side of the gold market, the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust <GLD>,
said its holdings fell to 1,298.030 tonnes on Friday. []
Among other precious metals, silver <XAG=> rose to a 30-year
high at $29.90 an ounce early on Monday, and was later at $29.74
an ounce against $29.36 late on Friday.
Net long positions in U.S. silver futures held by
speculators rose by 12 percent in the week ended Nov. 30, as
momentum traders jumped back into the market. []
Platinum <XPT=> was at $1,715.74 an ounce against $1,725.50,
while palladium <XPD=> was at $754.47 against $758.40. Palladium
prices have benefited from firm ETF buying in recent weeks,
analysts said.
"ETF buying of 150,000 ounces in the first three days of
December alone means that monthly inflows are already the
highest since the 339,000 ounce record set in January," said UBS
analyst Edel Tully in a note.
(Reporting by Jan Harvey; editing by Keiron Henderson)
