* ECB keeps rates on hold at 2 pct, BoE cuts by 50 bps
* Goldman Sachs ups 3-mth gold price forecast to $1,000/oz
* Aquarius Platinum cuts 2009 output forecast by 100,000/oz
(Updates with Bank of England, ECB rates decisions)
By Jan Harvey
LONDON, Feb 5 (Reuters) - Gold was up 1.5 percent after the
European Central Bank said it will keep interest rates on hold
and the Bank of England said it would cut by half a percentage
point, supported by buying of the metal as a haven from risk.
Traders are eyeing a press conference that will follow the
ECB's rates announcement for clues as to how it plans to tackle
the economic downturn.
Spot gold <XAU=> was quoted at $919.35/921.35 an ounce at
1334 GMT, up from $904.70 in New York late on Wednesday.
U.S. gold futures for April <GCJ9> delivery on the COMEX
division of the New York Mercantile Exchange rose $18.60 to
$920.20 an ounce.
"The backdrop of rate cuts has been supportive for gold over
the last few weeks and months, mainly on the fear of inflation
further down the line," said VM Group analyst Matthew Turner.
"Today's moves were just a confirmation of that theme."
The dollar lifted from lows against the euro after the ECB
announcement. ECB president Jean-Claude Trichet had already
flagged that no rate cut was on the cards. []
Interest in gold as a safe store of value also fuelled
buying among risk-averse investors.
Interest in physical bullion in the form of coins and bars
and investment products such as gold-backed exchange-traded
funds has soared as fears over the outlook for the global
economy has made asset prices volatile.
Investors also fear the large amount of government debt
poured into the banking sector will fuel inflation.
"The fact that gold as an asset class has more trust in it
than a lot of other financial products out there at the moment
means people are continuing to push money in there," said
Commerzbank trader Rory McVeigh.
"There has been steady buying of small investment-type
physical gold, particularly in Europe, and exchange-traded
funds."
The world's largest bullion-backed ETF, New York's SPDR Gold
Trust <GLD>, said its holdings hit another record on Wednesday,
rising to 859.49 tonnes. []
SAFE
Goldman Sachs lifted its three-month gold forecast to $1,000
an ounce from $700 an ounce, citing safe-haven demand for gold.
[]
"The gold price rally has been driven by surging demand for
gold in all forms: physical gold, exchange traded funds and
futures contracts and investors seek a 'safe store of value',"
the bank said in a note.
"It is also important to emphasise that the recent strong
demand for gold has not been irrational, but rather pretty much
in line with the probabilities of financial and sovereign
default."
Silver <XAG=> climbed to $12.82/12.90 an ounce against
$12.51 late in New York on Wednesday. Platinum <XPT=> was quoted
at $986/991 an ounce against $964.
Aquarius Platinum <AQP.L>, the world's fourth-largest
producer of the white metal, cut its 2009 production target by
100,000 ounces to 475,000 ounces, and said its output fell 6
percent in 2008 from the year before. []
"News of platinum producers struggling with costs and
production may help platinum prices move higher, although
continuing negative news on auto sales may hold prices back,"
Fairfax analyst John Meyer said.
Palladium <XPD=> meanwhile firmed nearly 4 percent to
$200/204 an ounce from $194, driven by buying for
palladium-backed ETFs, dealers said.
(Editing by Peter Blackburn)
