* Worries over NAfrica, euro zone, rates help gold rise
* Fed officials, Beige Book discuss price pressures.
* GFMS sees gold prices rising above $1,600/oz by year end
(Recasts, updates prices, market activity; new byline,
dateline, previously LONDON)
By Carole Vaporean
NEW YORK, April 13 (Reuters) - Gold rose on Wednesday,
recovering from its biggest one-day drop in nearly a month,
boosted by the dollar's early fall on expectations the U.S.
Federal Reserve will maintain a loose monetary policy despite
signs of price pressures.
Spot gold <XAU=> was at $1,457.30 an ounce by 2:39 p.m. EDT
(1839 GMT), up slightly from $1,453.95 an ounce late Tuesday.
It was in the middle of a new, higher plateau, a day after
selling off from a record peak at $1,476.21 hit on Monday.
U.S. gold futures for June delivery <GCv1> closed up $2 at
$1,455.60 an ounce, then rose further in after-hours trade.
Gold got a boost from the Fed's Beige Book report, which
noted signs that higher raw material and energy costs were
adding to price pressures.
The Fed's anecdotal report said the U.S. economy kept
improving over the past month on gains in manufacturing, but it
said companies are feeling higher energy and raw material
costs. []
Meanwhile, Dallas Fed President Richard Fisher said in an
article published on Wednesday that the U.S. central bank risks
employing a monetary policy that is too expansive and that
allows inflation to run out of control. []
"I see the risk that we don't manage to keep inflation
under control," Fisher wrote in an opinion piece published in
Germany's Handelsblatt business daily, pointing to firming
price pressures across the world.
Analysts said fears inflation may be picking up is one
factor underpinning gold prices and even spurring new buying.
"The Fed is starting to have some dissension on inflation,
Fisher came out and said inflation could ramp up in a
meaningful way if the Fed doesn't address it," said Adam
Klopfenstein, Senior Market Strategist at Lind-Waldock in
Chicago.
"Until you address the underlying factors that are driving
gold prices up, they will not meaningfully adjust," he added.
Gold fell below $1,445 an ounce on Tuesday as falling oil
prices knocked commodities, but worries over unrest in North
Africa and euro zone debt, plus expectations the Fed would lag
other central banks in tightening monetary policy, pulled
precious metal prices back up on Wednesday.
"It looks like gold held the $1,444 (support level) rather
well yesterday," said Afshin Nabavi, head of trading at MKS
Finance. "(There was) some demand out of India on the physical
front since yesterday. It feels okay here, although it is
eyeing oil and silver rather closely."
The prospect that the Fed could rein in its accommodative
monetary policy is a potential stumbling block for gold, which
as a non-yielding asset has a higher opportunity cost when
interest rates rise.
The metal has risen this year as rate rises in the euro
zone, China and Australia benefited other currencies versus the
dollar, but Fed policy is being eyed.
"The direction of U.S. monetary policy is the key theme
this quarter, and the uncertainty surrounding this includes
both the timing of any tightening decision as well as its
implementation," said UBS analyst Edel Tully in a note.
"This means that gold's movements in the coming weeks will
be highly sensitive to the debates among Fed members."
GFMS SEES GOLD ABOVE $1,600/oz
Metals consultancy GFMS said in a widely watched industry
report that gold's decade-long price rally could take the metal
above $1,600 an ounce by year-end, as investors' appetite for
gold sharpens further. []
The company sees gold prices averaging $1,455 an ounce this
year and sticking to a range of $1,319-1,620 an ounce,
executive chairman Philip Klapwijk told delegates at the launch
of its Gold Survey 2011.
Investment demand for gold exchange-traded funds softened.
Holdings of the largest, New York's SPDR Gold Trust <GLD>,
slipping by nearly a tonne on Tuesday. []
Holdings of the largest silver ETF, the iShares Silver
Trust <SLV>, eased around 30 tonnes from a record on the same
day, its biggest one-day outflow in about a month.
[]
Hefty inflows into the fund this year have accompanied a
sharp rise in silver prices, which peaked at 31-year highs of
$41.93 earlier this week.
Silver <XAG=> was bid higher at $40.53 an ounce against
$40.04 previously. Platinum <XPT=> was higher at $1,771.49 an
ounce against $1,765.70, and palladium <XPD=> advanced to
$764.47 against $761.40.
Prices at 2:14 p.m. EDT (1814 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCM1> 1455.60 2.00 0.1% 2.4%
US silver <SIK1> 40.237 0.171 0.0% 30.1%
US platinum <PLN1> 1777.20 2.90 0.2% -0.1%
US palladium <PAM1> 765.30 -4.80 -0.6% -4.7%
Gold <XAU=> 1454.80 0.85 0.0% 2.4%
Silver <XAG=> 40.23 0.19 0.5% 30.4%
Platinum <XPT=> 1769.99 4.29 0.2% 0.1%
Palladium <XPD=> 761.00 -0.40 -0.1% -4.8%
Gold Fix <XAUFIX=> 1457.50 -0.50 0.0% 3.4%
Silver Fix <XAGFIX=> 40.22 -22.00 -0.5% 31.3%
Platinum Fix <XPTFIX=> 1786.00 3.00 0.2% 3.2%
Palladium Fix <XPDFIX=> 773.00 2.00 0.3% -2.3%
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
