* Gold market stays higher as dollar weakens
* Investors watch for violence in Saudi Arabia, Libya
* Increased damage from Japan quake draws some safety buys
(Updates prices)
By Carole Vaporean
NEW YORK, March 11 (Reuters) - Gold remained near the day's
highs on Friday after the dollar weakened against the euro and
as investors sought the precious metal's safety after Japan's
earthquake and with Middle East violence rising heading into
the weekend.
A major earthquake in Japan proved a double-edged sword for
gold prices. While investors wanted a tangible asset amid the
chaos wreaked by the worst earthquake in Japan, the disaster
sent oil prices falling, which lessened the need for gold as a
hedge against inflation.
The massive quake pushed U.S. crude prices below $100 a
barrel after a 10-meter tsunami shut down dozens of plants in
the world's third-largest oil consumer. []
Spot gold <XAU=> advanced to $1,419.85 an ounce by 3:18
p.m. EST (2018 GMT), up from $1,412.59 an ounce at Thursday's
closing bid. U.S. gold <GCJ1> settled at $1,421.80, up $9.30.
Despite gains on Friday, gold booked its deepest weekly
loss since mid-January, falling earlier in the week with oil,
as some players unwound positions taken out as an inflation
hedge when oil prices advanced to highs last seen in 2008.
"With the weakness in the dollar now and a lot of the
anxiety going into the weekend, I think people want to hold
something tangible in their portfolio," said Senior Market
Strategist Adam Klopfenstein at Lind-Waldock in Chicago.
The euro rose 1 percent against the U.S. dollar after
leaders reached a deal on debt and deficit limits for euro zone
countries. [] []
Once the euro began its rally, precious metals investors
rushed into the market to assure they were not left behind if
gold prices should continue climbing over the weekend.
Klopfenstein added that the flare ups in North Africa and
the Middle East investors "are looking to precious metals for
that anxiety premium, fearing that if they're not long (gold)
now they would have to pay a significantly higher price to buy
it on Monday."
The biggest earthquake to hit Japan since records began 140
years ago struck the northeast coast, triggering a tsunami that
swept away everything in its path. Latest, estimates the death
toll to exceed 1,000 people. []
While analysts said they thought the earthquake in Japan
would have little significant impact on gold prices, some said
a few investors were impelled to buy out of fear when the death
toll, damage assessment and after shocks continued to rise.
Mostly, they said the uncertainty surrounding both the
earthquake and Middle East drew investors seeking a tangible
investment before leaving for the weekend.
"I think it's end-of-the-week activity for gold. The dollar
started weakening and after listening to Obama, (Libya) is
still a pretty serious situation. I think what we're seeing
here is short-covering," said Bill O'Neill, managing partner at
LOGIC Advisors in Upper Saddle River, New Jersey.
"The lower oil price takes some of the inflation steam out
of the (gold) market," he added.
U.S. President Barack Obama said the international
community was "tightening the noose" on Muammar Gaddafi, but
Libyan rebels said their three-week-old insurrection could fail
without a no-fly zone. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
More on Middle East unrest: [] []
More on quake, tsunami: [] []
Insider show on gold: http://link.reuters.com/fyz48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
In Tripoli, Libyan security forces used tear gas and fired
in the air to disperse worshipers near a mosque before they
could even attempt any protest, a Libyan said, citing
witnesses.
In Saudi Arabia police flooded the streets to deter
planned demonstrations, and a small Shi'ite protest was
reported in the oil-producing east. []
While prices ended calmly after a tumultuous day, investors
wanted the protection of gold in case of weekend flare ups.
SILVER APPEAL RISES
Spot silver <XAG=> was at $35.82 an ounce, up from
Thursday's closing bid at $35.25 an ounce, 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 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," a UBS note said.
Spot platinum <XPT=> rallied to $1,779.50 an ounce, from
$1,760.24 last on Thursday. But, palladium <XPD=> slipped to
$757.50 late on Friday, down from $765.50 on Thursday.
Prices at 3:02 p.m. EST (2001 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1421.80 9.30 0.7% 0.0%
US silver <SIK1> 35.935 0.869 0.0% 16.2%
US platinum <PLJ1> 1781.70 16.10 0.9% 0.2%
US palladium <PAM1> 765.50 -0.90 -0.1% -4.7%
Gold <XAU=> 1419.95 7.36 0.5% 0.1%
Silver <XAG=> 35.83 0.58 1.6% 16.1%
Platinum <XPT=> 1778.24 18.00 1.0% 0.6%
Palladium <XPD=> 757.97 -7.53 -1.0% -5.2%
Gold Fix <XAUFIX=> 1411.50 1.75 0.1% 0.1%
Silver Fix <XAGFIX=> 34.10 -109.00 -3.1% 11.3%
Platinum Fix <XPTFIX=> 1777.00 9.00 0.5% 2.7%
Palladium Fix <XPDFIX=> 754.00 2.00 0.3% -4.7%
(Additional reporting by Rebekah Curtis and Pratima Desai in
London. Editing by Lisa Shumaker)
