* U.S. consumer prices data underpins gold's gains
* Anti-government protests in Arab world in focus
* Tensions flare in Libya, Suez as unrest spreads
* Silver at 31-yr high; gold ratio at near 5-year low
(Recasts, adds details, updates prices to market close)
By Frank Tang
NEW YORK, Feb 17 (Reuters) - Gold prices rose on Thursday
for a fourth day, their longest winning streak since September,
as U.S. consumer price data stoked worries over inflation,
adding fuel to safe-haven buying due to flaring Middle East
tensions.
Bullion's gains sparked strong investment buying in silver,
which rallied to a 31-year high, further widening silver's
gains over gold and sending the gold-silver ratio to a near
five-year low.
Gold buying was underpinned after data showed U.S. core
consumer prices rose 0.2 percent in January, the fastest pace
in more than a year, indicating a long period of slowing
inflation had run its course. [] Earlier this
week, strong Chinese core inflation had also boosted gold.
"The CPI data showed there is a lot of inflation around
now. Certainly, inflation and the concern about the Middle East
in general are very supportive factors," said Bruce Dunn, vice
president at bullion dealer Auramet.
Safe-haven buying increased as unrest spread across the
Middle East and North Africa, after Bahrain on Thursday
launched a swift military crackdown on anti-government
protesters and clashes were reported in Libya and Yemen.
[]
Gold was set for its strongest weekly performance this
year, recovering from January when it notched the biggest
monthly decline in six months, as investor appetite was
rekindled by rising political tensions. Other safe-haven
investments like the Swiss franc <CHF=> and U.S. Treasuries
<US10YT=RR> also rose.
Spot gold <XAU=> rose to a five-week high at $1,384.65 an
ounce and was up 0.7 percent at $1,384.19 an ounce by 3:14 p.m.
EST (2014 GMT).
U.S. gold futures for April delivery <GCJ1> settled up $10
at $1,385.10, with volume about 55 percent below its 30-day
norm. That was in line with recent lower-than-normal turnover,
a possible sign of dwindling trading interest.
Silver <XAG=> hit a session high of $31.77 an ounce and was
up 3.6 percent at $31.73 an ounce.
"Good physical buying for silver on strong industrial and
retail coin and bar demand are underpinning the market," said
Auramet's Dunn.
The gold-silver ratio -- the number of silver ounces needed
to buy an ounce of gold -- fell to below 44, a key area near
its lowest level in five years, as silver has outperformed
gold. (Graphic: http://link.reuters.com/bec28r)
Year to date, silver was 3 percent higher, swinging into
positive territory with Thursday's rally, while gold was still
2.5 percent lower.
Gold and silver also benefited from a broad decline of the
dollar versus a currency basket <.DXY> after data showed U.S.
new unemployment benefit claims climbed faster than forecast
last week. []
The technical picture has also sharply improved this week,
with prices breaching key resistance levels, including
bullion's 50-day and 100-day moving averages, analysts said.
ARAB WORLD UNREST, INFLATION SUPPORT
Analysts said the metal could potentially rise further on
safe-haven demand as unrest spread across the Middle East after
protests earlier in the year unseated leaders in Tunisia and
Egypt. [] []
The prospect of rising inflation, not only in areas
currently affected by the phenomenon such as China and India,
but also in the United States and Europe, has become an
oft-cited reason to hold gold in recent weeks.
"The mood of the market is that an inflation story, a war
story, an Egypt story, a Bahrain story will all be bullish for
gold, because the market is looking for those at the moment,"
said ANZ Bank analyst Peter Hillyard.
In the physical market, the World Gold Council said overall
demand for gold is likely to remain firm this year, driven by
buying from India and China, as it released a report showing
bullion consumption hit a 10-year high in 2010.
[]
(BREAKINGVIEW: Gold bears may be overlooking Asia's gold
bugs [])
Palladium <XPD=> eased 0.4 percent to $841.09, and platinum
<XPT=> rose 0.9 percent to $1,843.
(Additional reporting by Jan Harvey and Amanda Cooper in
London; Editing by Walter Bagley)
Prices at 3:19 p.m. EST (2019 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1385.10 10.00 0.7% -2.6%
US silver <SIH1> 31.570 0.941 0.0% 2.0%
US platinum <PLJ1> 1844.00 9.70 0.5% 3.7%
US palladium <PAH1> 843.00 4.65 0.6% 4.9%
Gold <XAU=> 1384.18 9.98 0.7% -2.5%
Silver <XAG=> 31.74 1.11 3.6% 2.9%
Platinum <XPT=> 1841.74 15.00 0.8% 4.2%
Palladium <XPD=> 841.09 3.12 0.4% 5.2%
Gold Fix <XAUFIX=> 1379.00 2.00 0.1% -2.2%
Silver Fix <XAGFIX=> 30.61 -16.00 -0.5% -0.1%
Platinum Fix <XPTFIX=> 1834.00 8.00 0.4% 6.0%
Palladium Fix <XPDFIX=> 839.00 2.00 0.2% 6.1%
