* Bernanke interview raises prospect of further U.S. easing
* Euro zone debt fears run high ahead of Brussels meeting
* Silver rallies above $30/oz for first time since 1980
* Gold hits record highs in euro, sterling terms
(Updates prices)
By Jan Harvey
LONDON, Dec 6 (Reuters) - Gold rose above $1,420 an ounce
for the first time since mid-November on Monday as speculation
U.S. authorities will extend monetary easing and concern over
euro zone debt lifted buying of the metal as a haven from risk.
While strength in the U.S. unit kept a tight rein on gains
in dollar-priced gold, gold hit record highs in sterling and
euro terms, and Japanese yen-denominated bullion hit its highest
since early 1983. Silver prices also rallied to 30-year highs.
Spot gold <XAU=> rose as high as $1,420.31 an ounce and was
bid at $1,418.25 at 1704 GMT, against $1,414.35 late on Friday.
It hit a record $1,424.10 early in November. U.S. gold futures
for December delivery <GCZ0> rose $13.30 an ounce to $1,419.50.
Sterling-priced gold <XAUGBP=R> reached a record 906.06
pounds an ounce, euro-priced gold reached a high of 1,070.80
euros an ounce, while gold denominated in yen <XAUJPY=R> hit its
highest since Feb. 1983 at 117,541 yen 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 paper currencies. This added to the momementum
gold picked up last week on worries over euro zone debt levels.
"Gold is supported either way -- risk sentiment turning
sour, or (by) further weakness in the greenback," said VTB
Capital analyst Andrey Kryuchenkov. "Clearly investment demand
is still there."
The dollar rebounded on Monday 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 would usually limit gains in
gold, it can rise in tandem with the U.S. currency at times when
risk aversion is extremely elevated.
"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) safety
net for debt-stricken members. []
Yields on sovereign bonds issued by countries such as
Portugal and Spain rose on Monday on uncertainty surrounding a
meeting of euro zone finance ministers, as the region's debt
crisis still occupied 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 $30.06 an ounce early on Monday, and was later at $29.98
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 $1,720.00 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.
"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.
(Editing by James Jukwey)
