* Gold benefits from end-of year push into commods
* Europe debt crisis, U.S. money supply in focus
* Coming Up: ISM semi-annual econ forecast; 1500 GMT
(Adds comment, details; refreshes prices; changes byline and
dateline, prvs SINGAPORE)
By Amanda Cooper
LONDON, Dec 7 (Reuters) - Gold hit record highs for a second
successive day on Tuesday, driven by fund buying ahead of the
end of the year, the prospect of more U.S. monetary easing and
investor nervousness over the European debt crisis.
Silver hit a 30-year high for the seventh consecutive day,
driven by a weakening dollar and a push into commodities by the
investment community ahead of the end of the year. Gold in euros
also hovered near record highs as tension on the bond markets
ran high.
Spot gold <XAU=> rose to an all-time high at $1,428.15 an
ounce before tracking back to $1,425.51 an ounce at 1042 GMT, up
from $1,422.85 the day before. U.S. gold futures for February
delivery <GCG1> were up $10.70 an ounce at $1,426.80.
"There is generally a good appetite for commodities, almost
a feeling of missing the boat, as we see the predictions for
2011 starting to arrive and painting a pretty rosy picture for
the sector as a whole," said Ole Hansen, a senior manager at
Saxo Bank.
Germany and other fellow euro zone states have resisted
calls from the International Monetary Fund to do more to quell
the currency bloc's debt crisis and say the existing emergency
fund is sufficient, although the euro edged higher on the back
of optimism that Ireland would pass an austerity budget.
[] []
Gold has also got a boost from evidence the U.S. economy is
not creating jobs quickly enough to bring down unemployment and
from Federal Reserve Chairman Ben Bernanke's signal last week
that the central bank could expand its existing policy-easing
programme by buying more government bonds. []
TWO STEPS FORWARD, ONE BACK
With the U.S. dollar set to come under more pressure from
the prospect of rising money supply, gold should reap the
benefits of investors seeking an alternative to volatile
currencies, analysts said.
However, the end of the year traditionally brings with it
less liquidity and greater potential for rapid shifts in price
direction, meaning that gold could see more setbacks before
resuming its uptrend.
"Tactical investors have turned positive on gold and silver
and increased their long exposure. In our view, positioning does
not look excessive, suggesting that the sector could attract
further near-term flows," said Credit Suisse analysts in a note.
"However, with markets closing in on critical price levels,
risks of investors' taking profits have increased as well."
In investment news for gold, China's Lion Fund Management
Co., which is launching the country's first gold fund worth up
to $500 million, is examining a dozen gold-backed
exchange-traded funds on the global market as potential targets.
[]
Holdings of gold in the SPDR Gold Trust <GLD>, the world's
largest gold-backed ETF, were unchanged on Tuesday, having risen
by over 11 tonnes so far this month, compared with a 1 tonne
increase over the same period last month. [].
Silver <XAG=> rallied for a seventh day in a row, earlier
rising by nearly 1 percent to fresh 30-year highs at $30.42 an
ounce, and were trading at $30.35, up from $30.14 the day
before.
The world's largest silver-backed exchange-traded fund,
iShares Silver Trust, said its holdings rose to 10,816.69 tonnes
by Dec. 6 from 10,778.68 on Dec. 2. The holdings jumped to an
all-time high of 10,893.68 tonnes on Nov. 23. []
The number of ounces of silver needed to buy one ounce of
gold hit its lowest level since February 2007 at just 46.99,
having declined from a seven-month high this February at 70.91.
Platinum <XPT=> was virtually flat at $1,720.49 an ounce,
while palladium <XPD=> was up 0.9 percent at $762.00.
(Additional reporting by Lewa Pardomuan in Singapore;
Editing by Jane Baird)
