* Dollar take little reassurance from World Bank, IMF meets
* Further U.S. quantitative easing still seen on the cards
* Gold:silver ratio falls to lowest since Aug. 2008
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Oct 11 (Reuters) - Gold prices rose back towards
$1,350 an ounce in Europe on Monday and silver touched a new
30-year high as expectations the United States will introduce
further monetary easing undermined faith in the dollar.
Spot gold <XAU=> was bid at $1,347.30 an ounce at 0931 GMT,
against $1,343.25 late in New York on Friday. U.S. gold futures
for December delivery <GCZ0> rose $2.90 an ounce to $1,348.20.
Spot gold is still within sight of last week's record $1,364.60.
The dollar slipped on Monday after world finance ministers
failed to reach agreement on currency imbalances at a series of
meetings this weekend, leaving the U.S. Federal Reserve set to
pursue loose monetary policy to support its ailing economy.
[]
"We don't seem to have any agreement on any sort of currency
accord," said Citi analyst David Thurtell, saying gold's inverse
link to the dollar had been particularly strong in recent weeks.
"Gold has pretty much stuck to tracking dollar moves."
Historically a weaker dollar boosts gold as it makes
dollar-priced commodities cheaper for other currency holders,
and lifts the metal's appeal as an alternative asset.
This correlation weakened early this year as both gold and
the dollar benefited from concerns over European sovereign debt
levels. However, it has now reasserted itself.
"Precious metals... continued to benefit from a weak
U.S. dollar and the `race to the bottom' in global currency
markets," said Morgan Stanley in a note.
"We view QE (quantitative easing) and its monetary
consequences as an unequivocal benefit for gold and silver in
particular, as investors seek out their role as stores of value
in times of fiat currency risk."
As well as currency effects, gold is being supported by
expectations investors will add to their bullion holdings as a
portfolio diversifier, both in the private and official sectors.
Russia's central bank has bought over 100 tonnes of gold on
the domestic market this year, board member Sergei Shvetsov said
on Monday, and speculation is rife that a number of other
central banks, chiefly in Asia, are set to add to their
holdings. []
INVESTOR DEMAND
New investment products are also emerging, with two money
managers in China vying to launch the country's first gold funds
as early as this year to meet investor demand for the precious
metal. []
Meanwhile South Africa's Standard Bank <SBKJ.J> said on
Monday it will act as the first metal provider, participating
dealer and market maker for a Hong Kong-based firm that plans to
launch a new gold exchange-traded fund (ETF). []
Burgeoning demand has driven gold prices more than 20
percent higher so far this year, as supply struggles to keep up.
Selling of gold scrap has risen along with prices, but not
significantly, and official sector selling has tailed off.
Gold output in number one gold producer China was 27.655
tonnes in August, the Ministry of Industry and Information
Technology said on Monday, down 11 percent from 31.059 tonnes in
July. []
Among other precious metals, silver <XAG=> hit its highest
since 1980 at $23.65 an ounce and was later bid at $23.25 an
ounce against $23.20.
The gold-silver ratio - the number of ounces of silver
needed to buy an ounce of gold - fell to its lowest in more than
two years on Monday near 57, down from above 68 in late August,
as silver became increasingly expensive compared to gold.
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For a graphic on the ratio, click:
http://graphics.thomsonreuters.com/AS/0810/RS_20101110113030.jpg
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"We continue to favour silver, as industrial demand and
imports into China are expected to push the gold/silver ratio
lower," said Deutsche Bank in a weekly note.
Meanwhile platinum <XPT=> was at $1,695.50 an ounce against
$1,699.35, and palladium <XPD=> at $585 against $583.53.
(Reporting by Jan Harvey; editing by Keiron Henderson)
