* Investors on alert for Fed moves
* Silver eyes 30-year highs above $21
* Coming up: U.S. Aug consumer prices at 1230
(Recasts, adds comment/detail, pvs SINGAPORE)
By Melanie Burton
LONDON, Sept 17 (Reuters) - Gold leapt to a record high on
Friday as a weaker dollar and growing speculation of further
quantitative easing by the U.S. Federal Reserve prompted a
flurry in investment buying.
Sister-metal silver <XAG> was supercharged, benefiting also
from gains in prices for industrial metals to test the $21 mark.
A break above $21.24 would open the way for prices to hit levels
last seen in October of 1980. [].
Spot gold <XAU=> hit an all-time high of $1,282.75 a troy
ounce before easing to a bid at $1,280.10 by 1037 GMT, compared
with $1,272.20 late in New York on Thursday. It has gained more
than $100 or 8.4 percent since the start of August.
Tom Kendall, analyst at Credit-Suisse said the dollar has
been a major driver behind gold's recent run. The dollar <.DXY>
fell against a basket of currencies, hurt by growing talk of
more quantitative easing from the Fed next week. []
"Physical has fallen away in terms of fresh flow from the
Middle East, Turkey, India, but ...there has been a bit of
short-covering coming through from scrap players, alongside the
momentum buying," Kendall said.
Quantitative easing is a process by which central banks
attempt to pump money into economies by printing money and
buying bonds. Excess liquidity can often lead to price pressures
as too much money chases too few goods and services.
A lower U.S. currency makes dollar-denominated commodities
cheaper for holders of other currencies. Investors use gold as a
store of value during times of high inflation or financial
market turmoil.
Holdings in the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD.P> were flat overnight at 1,294.746
tonnes having fallen the day before. But earlier this week the
number rose by more than 6 tonnes.
SEASONALLY STRONG
Later on Friday the market will see inflation data from the
United States, which could impact the dollar and expectations of
potential moves by the U.S. Federal Reserve.
September and October are typically seasonally strong
periods for jewellery demand, with a number of small gold-buying
festivals in major consumer India, while Western manufacturers
stock up ahead of Christmas.
Lending background support this week however, was news of
AngloGold Ashanti's <ANGJ.J> capital raising, a key function of
which was to buy back its outstanding gold hedge. []
"They've raised the capital, but I haven't heard any strong
rumours (that they have bought any gold)," said analyst Robin
Bhar of Credit Agricole.
Spot silver <XAG=> was bid at $20.87 an ounce from $20.72 in
New York on Thursday. Expectations of stronger growth in the
final few months of this year has helped boost industrial
precious metals platinum, palladium and silver.
However, silver is according to technical analysis,
overbought and could be due a correction.
"Silver is renowned for overshooting and undershooting, so
this rally can get more exponential but we are already up 18
percent since late August," Kendall said.
"In my opinion, that kind of rate of increase can't be
sustained. I would not be recommending anyone to get long or
longer silver at $21."
Spot platinum <XPT=> hit $1,622 an ounce, its highest since
May 19. It was last at $1,622 from $1,603.65 on Thursday and
palladium <XPD=> was bid at $548.00 an ounce from $544.65.
(Editing by James Jukwey)
