* Gold cuts losses but still down 1 pct after Saudi unrest
* Cash need offsets safe haven despite Libya, EU debt fear
* Bullion weighed down by jitters ahead of EU summit
* Coming up: US retail sales, consumer sentiment Friday
(Rewrites, adds comments, graphic, updates prices)
By Frank Tang
NEW YORK, March 10 (Reuters) - Gold pared losses on
Thursday, after witnesses said police in oil-rich Saudi Arabia
had fired upon protesters, prompting investors to buy bullion
as a safe haven.
Saudi police dispersed a protest by a Shi'ite minority in
the OPEC member's oil-producing Eastern Province on Thursday
with one to four people wounded as shots were heard, witnesses
said. []
"Anytime you have any type of supply issue with crude oil,
speculators try to hedge themselves with the gold market
against inflation, which is good for gold and silver," said
Michael Daly, gold specialist of futures broker PFGBest.
Gold often spikes in response in times of political and
economic uncertainty because the metal's intrinsic value is
unaffected by fiat currencies.
Spot gold <XAU=> fell as low as $1,402.72 an ounce, a
two-week low, and was later down 1.2 percent at $1,412.50 an
ounce by 3:09 p.m. EST (2009 GMT).
U.S. gold futures for April delivery <GCJ1> settled down
1.2 percent to $1,412.50. Volume exceeded 200,000 lots, up
about 15 percent from the 30-day average, preliminary Reuters
data showed.
Spot silver <XAG=> fell 2.2 percent to $35.27 an ounce, as
investors unwound recent profits due to physical supply
tightness.
Earlier this week, the gold-to-silver ratio fell to a
13-year low after silver had outperformed bullion
CROSS ASSET SELL-OFF
Bullion retreated from its record high of $1,444.40 an
ounce set earlier this week, as a cross-asset sell-off
accelerated on Thursday. Both Wall Street and oil fell over 1
percent after an unexpected Chinese trade deficit and renewed
euro zone debt jitters fueled global growth concerns
(Graphic: http://link.reuters.com/waz48r)
In spite of a downgrade of Spain's credit and ongoing
violence in Libya, gold sold off as the need to raise cash to
cover margin calls more than offset investor worries about
global economic growth.
Gold was hit as the dollar rose almost 1 percent against
the euro after Moody's downgraded Spain to Aa2 from Aa1 with a
negative outlook, leaving the euro vulnerable to more downward
pressure in the coming weeks. [] []
"Spain's downgrade is clearly helping the dollar at this
point. A few weeks ago, the story was everybody rushing into
gold rather than the dollar, and now the tide seems to have
shifted a bit," said Peter Buchanan, senior economist of CIBC
World Markets.
On charts, spot bullion bounced off support after briefly
dipping below its 20-day moving average earlier in the
session.
Tom Pawlicki, precious metals and energy analyst at futures
broker MF Global, cited technical selling as gold this week has
failed to clear key resistance at $1,435 an ounce -- the upper
trendline of a long-term rising channel dated back from 2008.
(Graphic: http://link.reuters.com/quz48r)
EYES ON EURO ZONE SUMMIT
Bullion investors will watch closely for possible
development out of a Friday summit of a group of 17 euro zone
leaders. The goal for the meeting is to boost competitiveness
and to quell the region's debt crisis. []
UBS said in a note that financial markets are likely to be
disappointed by the outcome of the European meeting, which
could benefit bullion.
"There is growing acceptance that Europe's debt crisis will
get worse before it gets better, as our fixed income
strategists maintain, and that this will be gold-positive," UBS
said.
Platinum <XPT=> slid 1.9 percent to $1,761.49 an ounce,
while palladium <XPD=> lost 1.9 percent to $761.97.
Prices at 3:09 p.m. EST (2009 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1412.50 -17.10 -1.2% -0.6%
US silver <SIK1> 35.066 -0.981 0.0% 13.3%
US platinum <PLJ1> 1765.60 -36.40 -2.0% -0.7%
US palladium <PAM1> 766.40 -15.25 -2.0% -4.6%
Gold <XAU=> 1412.85 -15.94 -1.1% -0.5%
Silver <XAG=> 35.25 -0.80 -2.2% 14.2%
Platinum <XPT=> 1761.49 -35.00 -1.9% -0.3%
Palladium <XPD=> 761.97 -15.00 -1.9% -4.7%
Gold Fix <XAUFIX=> 1413.25 -11.00 -0.8% 0.2%
Silver Fix <XAGFIX=> 35.19 -98.00 -2.7% 14.9%
Platinum Fix <XPTFIX=> 1778.00 12.00 0.7% 2.7%
Palladium Fix <XPDFIX=> 769.00 1.00 0.1% -2.8%
(Additional reporting by Jan Harvey in London; Editing by Lisa
Shumaker)
