* Investors watch Saudi Arabia
* Gold market remains tight, scrap sales seen
* U.S. Feb retail sales rise 1 percent
(Adds comment/detail, updates prices)
By Pratima Desai and Rebekah Curtis
LONDON, March 11 (Reuters) - Gold pushed higher on Friday as
a major earthquake in Japan and unrest in the Middle East kept
the metal underpinned, but a fall in oil prices reduced the
metal's appeal as a refuge from inflationary pressures.
Spot gold <XAU=> was bid at $1,415.40 an ounce at 1621 GMT,
up from $1,412.59 late in New York on Thursday.
"It's a logical reaction," Robin Bhar, an analyst at Credit
Agricole said of gold's rise. "With all the fear factors and the
risk aversion and the desire for ways to hedge against that."
The biggest earthquake to hit Japan since records began 140
years ago struck the northeast coast, triggering a 10-metre
tsunami that swept away everything in its path, killing hundreds
of people. []
"The earthquake will act as a blow to growth in the short
term, because it will be a drag on the economy," Bhar added.
Also keeping markets nervy, police flooded the streets of
the Saudi capital on Friday to deter a planned demonstrations
inspired by pan-Arab revolt, but a small Shi'ite protest was
reported in the country's oil-producing east. []
Meanwhile, in Libya forces loyal to leader Muammar Gaddafi
intensified a counter-offensive against insurgents.
[]
But the metal was down about $30 from a lifetime high of
$1,444.40 a troy ounce on Monday.
Investors protect their portfolios by buying gold when they
expect rising price pressures, often fuelled by energy costs,
but U.S. crude futures <CLc1> slipped to around $100 a barrel.
Disruption to output from Saudi Arabia, which has the world's
biggest reserves, however, would send oil prices much higher.
"Historically, those sort of events in the Middle East have
tended to be quite supportive," said Michael Lewis, head of
commodity research at Deutsche Bank.
"But the effect will probably fade quite quickly."
Gold prices were little affected by data showing U.S. retail
sales rose an expected 1 percent in February and by other data
showing U.S. consumer sentiment fell to its lowest level in five
months in early March. [] []
TAINTED
Silver <XAG=> was bid at $34.92 an ounce from $35.25 on
Thursday, having rallied to a 31-year peak above $36 on Monday.
Holdings of iShares Silver Trust <SLV> were unchanged at a
record high at 10,974.06 tonnes.
"While clients we visited in the U.S. and Canada over the
past two weeks mostly wanted to talk about gold, we noted a
clear upward shift in their interest in silver," UBS said in a
note.
"There is little doubt that gold has lost some of its
previous supporters to silver. Of those clients able to invest
in the metal itself, rather than being restricted to silver
equities, close to half were extremely bullish on silver's
prospects."
Spot platinum <XPT=> was at $1,771.74 an ounce from
$1,760.24 on Thursday and palladium <XPD=> at $750.72 an ounce
from $765.50 an ounce.
"The appeal of (platinum and palladium) has been tainted by
people worrying about the rise in oil prices and the impact on
economic growth," a trader said.
(Editing by Jason Neely and Keiron Henderson)
