* Bullion reaches highest level since July 2008
* U.S. bank rescue plan disappoints
* SPDR ETF holdings rise to fresh record
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 11 (Reuters) - Gold jumped 3 percent
to a 6-1/2 month high on Wednesday as risk aversion prompted
investors to buy gold and bullion-backed exchange-traded funds
as a safe haven.
Caesar Bryan, portfolio manager of the $350-million GAMCO
Gold Fund, said the rally was a "catch-up" move from the
previous session when disappointing investors sold stocks after
the U.S. government unveiled a massive U.S. bank rescue plan.
"There has been a step-up in investment demand as evidenced
by the GLD," said Bryan, referring to the world's largest gold
ETF SPDR Gold Trust <GLD.P> , which has since the beginning of
the year jumped about 115 tonnes to 895 tonnes as of Feb. 10.
Spot gold <XAU=> was at $939.75 an ounce at 3:15 p.m. EST
(2015 GMT), up 2.8 percent from the last trade $914.15 late on
Tuesday.
Spot bullion prices pushed through tough resistance at just
above $930, spiking to a peak of $953.30 in ultra thin volume
after the London trading session ended.
U.S. gold for April delivery <GCJ9> settled up $30.30, or
3.3 percent, at $944.50 an ounce on the COMEX division of the
New York Mercantile Exchange.
"There was a lot of disappointment behind the package,
either because the measures weren't concrete enough or because
they thought they hadn't tackled the root cause of the
problem," said BNP Paribas analyst Michael Widmer.
"A lot of investors reassessed the risk in the market, and
as risk aversion increased, it helped prices."
The United States on Tuesday rolled out a revamped bank
rescue plan that may cost more than $2 trillion. Stocks slid by
the most in two months after the plan was unveiled, while gold
climbed 2 percent as investors sought safety. []
CMC Markets strategist Ashraf Laidi said doubts about the
U.S. plan to shore up banks and the economy had led to fears of
an escalation of debt issuance.
"This combination of further debt escalation with a lack of
any economic result is further fortifying gold's ascent," he
said.
In official gold sector news, the International Monetary
Fund said it does not intend to alter plans to sell just over
400 tonnes of gold to fund changes to its financing base.
[]
UPBEAT OUTLOOK
Africa's top gold producers were upbeat on gold's outlook
at this week's annual African mining conference. Experts say
the metal could rise above $1,000 an ounce this year.
[]
But the world's No. 4 gold producer, Gold Fields <GFIJ.J>,
plans to cut as much as 10 percent of its workforce through
voluntary layoffs, a union official said. []
Silver <XAG=> rose to $13.51 an ounce, up 3.1 percent from
its previous close of $13.10.
The metal has also benefited from ETF inflows. Holdings of
the largest silver-backed ETF, the iShares Silver Trust <SLV>,
rose 1 percent to a record 7,606.89 tonnes on Monday.
Among other precious metals, platinum <XPT=> extended
Tuesday's gains to end at $1,067.50 an ounce, up 3.4 percent
from its last finish of $1,032, while palladium <XPD=> was at
$212.50 an ounce, up 1.2 percent from its previous close $210
on Tuesday.
(Reporting by Frank Tang; Editing by Marguerita Choy)
