* Gold hits record above $1,060 as weak dollar persists
* SPDR gold ETF reports fourth successive daily inflow
* Silver, palladium hit multi-month peaks
(Recasts, updates closing prices, comments, market activity,
adds second byline, dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Oct 8 (Reuters) - Gold rose to a fresh
all-time high for a third straight day on Thursday as
persistent dollar weakness increased bullion's appeal as a
hedge against losses in dollar-denominated assets.
Gold also benefited as economic optimism prompted investors
to buy assets perceived to be riskier -- everything from
commodities to equities -- and to sell the safe-haven dollar
and U.S. Treasury bonds.
Caesar Bryan, who manages $575 million in mutual fund
assets at GAMCO Gold Fund in New York, said that gold prices
should be supportive above the psychological $1,000-an-ounce
level.
"Gold is not over-owned. People want to diversify their
currency holdings into real assets," Bryan said.
Gold's gains also lifted other precious metals, with silver
reaching its strongest level since July 2008 and palladium
hitting a 13-month peak.
Spot gold <XAU=> hit a record high of $1,061.20, and was at
$1,053.90 an ounce at 1:40 p.m. EDT (1740 GMT) against
$1,043.70 late in New York on Wednesday.
Most-active December gold futures <GCZ9> settled up $11.90,
or 1.1 percent, at $1,056.30 an ounce on the COMEX division of
the New York Mercantile Exchange.
Dollar weakness is still supporting gold. A softer U.S.
currency makes the dollar-priced metal cheaper for holders of
other currencies and boosts its appeal as an alternative
asset.
"The market is nervous," said Afshin Nabavi, head of
trading at MKS Finance. "Any big transaction seems to take the
market with it momentarily. But overall, it is looking firm."
The dollar fell to a 14-month low against a basket of
currencies on Thursday as rising equities markets fueled demand
for riskier assets at the expense of the safe-haven U.S.
currency.
From a technical perspective, gold is well-placed for
further gains after ending two sessions above its previous
record high just above $1,030 an ounce, analysts said.
Technical analysts at Barclays Capital said their outlook
on gold was bullish, with a push towards $1,120 now on the
cards.
ETFS SEE INFLOWS
Demand for gold-backed exchange-traded funds edged up after
waning over the summer months, with the largest, New York's
SPDR Gold Trust <GLD>, reporting a fourth straight day of
inflows on Tuesday. []
Investors in the fund bought nearly 14 tonnes of gold,
lifting its holdings 1.3 percent, in the week to Tuesday.
Among other precious metals, silver hit a 14-month high,
lifted by gold's gains and also, as an industrial metal,
benefiting from optimism over the global economic outlook.
Spot silver <XAG=> was at $17.77 an ounce against $17.55,
having earlier touched a high of $17.92 an ounce.
Platinum and palladium, primarily used in autocatalyst
production, also rose in gold's wake. Platinum <XPT=> was at
$1,338 an ounce against $1,326, while palladium <XPD=> was at
$319 against $311. Earlier it hit a 13-month high of $320.50.
Mitsubishi Corp precious metals strategist Tom Kendall said
palladium had had a tendency to track gold in recent days.
Earlier this year the platinum to palladium price ratio
reached 5.5 to 1, indicating that platinum was significantly
overvalued relative to its cheaper sister metal, he said. Since
then the ratio has narrowed to 4.2 to 1 today.
Kendall said this was partly due to expectations carmakers
will push to substitute platinum for palladium in
autocatalysts.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1056.30 11.9 1.1 884.3 19.5
US silver <SIZ9> 17.815 0.315 1.8 11.295 57.7
US platinum <PLF0> 1353.20 25.50 1.9 941.50 43.7
US palladium <PAZ9> 322.60 8.55 2.7 188.70 71.0
Prices at 1:51 p.m. EDT (1751 GMT)
Gold <XAU=> 1055.45 11.75 1.1 878.20 20.2
Silver <XAG=> 17.77 0.22 1.3 11.30 57.3
Platinum <XPT=> 1338.50 12.50 0.9 924.50 44.8
Palladium <XPD=> 319.50 8.500 2.7 184.50 73.2
Gold Fix <XAUFIX=> 1045.00 -9.75 -0.9 836.50 24.9
Silver Fix <XAGFIX=> 17.80 40.00 2.3 14.76 20.6
Platinum Fix <XPTFIX=> 1335.00 1.00 0.1 1529 -12.7
Palladium Fix<XPDFIX=> 317.50 1.50 0.5 365.0 -13.0
(Editing by Christian Wiessner)
