* Gold futures rise above $1,300 on inflation worry, Fed
* Silver climbs to 30-year peak on gold's coat-tails
* Coming up: US consumer confidence on Tuesday
(Recasts, updates prices to market close, new byline/dateline,
previously LONDON)
By Frank Tang
NEW YORK, Sept 24 (Reuters) - Gold futures rose on Friday,
hitting all-time highs above $1,300 an ounce as investors
fretted over economic uncertainty after the Federal Reserve
raised expectations to take new measures to spur growth.
Silver also surged to a 30-year high on strong investment
buying, with holdings of the world's largest silver-backed
exchange-traded fund rising to a record high.
Adam Klopfenstein, senior market strategist at MF Global
unit Lind-Waldock, said renewed worries about inflation buoyed
gold after U.S. durable goods data came in stronger than
expected and grain prices rallied.
"Forward looking, on the inflation front, you are getting a
lot of long-term investors coming into the gold market,"
Klopfenstein said.
U.S. gold futures for December delivery <GCZ0> hit a record
$1,301.60 an ounce, then retreated from session highs as Wall
Street rallied, with the S&P 500 stock index up 2 percent.
The benchmark contract settled up $1.80 at $1,298.10 an
ounce. Spot gold <XAU=> rose 0.3 percent to $1,297.30 an ounce
at 3:28 p.m. EDT (1928 GMT). Bullion posted its biggest
two-week gain since May.
Gold has risen more than 4 percent so far this month and
hit record highs in six out of the last seven sessions.
New orders for a wide range of long-lasting U.S.
manufactured goods rose in August and business spending plans
rebounded strongly [], while grain prices rose
across the board on a weaker dollar. []
Expectations of further dollar weakness underpinned gold,
as the greenback fell against a basket of currencies to its
lowest level since February. []
The Fed said on Tuesday it stood ready to pump billions of
dollars into the economy if needed, through purchases of
government debt, a process known as quantitative easing. The
prospect prompted investors to buy bullion as a hedge against
the possibility of a double-dip recession or inflation.
"The U.S. Fed is obviously contemplating, and the market is
expecting, some kind of statement on quantitative easing," said
Deutsche Bank analyst Daniel Brebner. "The influx of new money
in the system raises longer term expectations for inflationary
forces."
In addition, a number of major countries have been moving
to curb their currencies to bolster growth. This has boosted
gold's appeal as an alternative investment.
DEALERS SELL GOLD OPTIONS
Option dealers could keep selling gold options to bring in
premiums from buyers, as price volatility petered out despite a
rally of gold futures to all-time highs, COMEX floor traders
said on Friday. (Graphic: http://link.reuters.com/tev35p )
Since late July, gold's 30-day implied volatility, a common
risk gauge, fell to 15.5, nearly 40 percent below this year's
high at 25 in May.
Gold appeals to investors uncertain about inflation,
deflation, the dollar and further Fed stimulus, said Evy
Hambro, joint chief investment officer of BlackRock's Natural
Resources team, which has more than $36 billion assets under
management.
"I think gold is quite realistic where it is right now," he
said.
Gold's rally to record highs generated strong investor
interest in silver, which is also widely used as an industrial
metal in the electronics and photography sectors.
Silver <XAG=>, tracking gains in gold, rose 1.5 percent to
$21.45 an ounce. During the session, silver surged to its
highest level since 1980 at $21.47 an ounce.
Holdings of the world's largest silver-backed
exchange-traded fund, the iShares Silver Trust <SLV> hit an
all-time high of 9,582.59 tonnes on Thursday. []
Platinum <XPT=> climbed 0.4 percent to $1,644.50 an ounce,
while palladium <XPD=> rose 1.6 percent to $559.50 an ounce.
Prices at 3:53 p.m. EDT (1953 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1298.10 1.80 0.1% 18.4%
US silver <SIZ0> 21.383 0.189 0.0% 26.9%
US platinum <PLV0> 1639.80 -6.10 -0.4% 11.5%
US palladium <PAZ0> 558.50 3.65 0.7% 36.6%
Gold <XAU=> 1296.15 2.65 0.2% 18.2%
Silver <XAG=> 21.42 0.28 1.3% 27.2%
Platinum <XPT=> 1644.50 6.40 0.4% 12.2%
Palladium <XPD=> 559.50 8.55 1.6% 38.0%
Gold Fix <XAUFIX=> 1297.00 -1.00 -0.1% 17.5%
Silver Fix <XAGFIX=> 21.35 27.00 1.3% 25.7%
Platinum Fix <XPTFIX=> 1645.00 1.00 0.1% 12.2%
Palladium Fix <XPDFIX=> 562.00 4.00 0.7% 39.8%
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
