* Rally may end at $1,387/oz-technicals
* Coming Up: U.S. ECRI weekly; 1530 GMT
* G20 Finance ministers and central bank governors meeting
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Feb 18 (Reuters) - Gold rose to its strongest
level in five weeks on Friday, heading for its best weekly gain
since early January, on inflation fears sparked by rising oil
and food prices as well as flaring Middle East tensions.
As anti-government protests rock the Middle East, the White
House, U.S. Secretary of State Hillary Clinton and the Pentagon
all urged Bahrain's leaders to pull back after police attacked
demonstrators in the Gulf kingdom's worst violence in decades.
Spot gold added $1.64 to $1,384.94 an ounce by 0538
GMT, extending gains made on Thursday after data showed U.S.
core consumer prices rose 0.2 percent that month, the fastest
pace in more than a year.
Bullion was below a lifetime high around $1,430 hit in
December.
"As we see more prices in the grains move higher, we are
convinced that people are saying: well OK, what's the store of
value now? So they are moving to gold as a result of that," said
Jonathan Barratt, managing director of Commodity Broking
Services in Melbourne.
"Given what's happening in the Middle East, given what's
happening with foodstuff, the market remains concerned over
inflationary spike."
France's agriculture minister warned the United Nations that
food riots like those of three years ago could break out around
the world because of steep rises in food prices. In 2008, riots
broke out in countries as far apart as Egypt, Cameroon and
Haiti.
The International Monetary Fund will warn G20 finance
ministers this weekend of growing risks to the world economy
from surging food prices and public finances while also
advocating a somewhat weaker dollar.
According to technical charts, gold -- which investors turn
to as a hedge against inflation -- may end an exhausted rally at
around $1,387 per ounce as a rising wedge is contracting to a
point, says Wang Tao, a Reuters market analyst for commodities
and energy technical.
For a 24-hrs gold technical outlook: http://graphics.thomsonreuters.com/WT/20111802090504.jpg
U.S. gold futures for April hardly changed at
$1,385.6 an ounce.
Silver held near its highest level since 1980 on
signs that investment demand was picking up. Holdings in the
world's largest silver-backed exchange-traded fund, iShares
Silver Trust , edged up to 10,438.56 tonnes by Feb. 17 from
10,411.23 tonnes on Feb. 14.
Brent crude oil rose towards $103 a barrel on Friday, as
unrest spreading across the Middle East fanned fears of a supply
disruption in the major oil-producing region. U.S. crude edged
lower, but held above $86 a barrel, after jumping more than
$1.00 the previous day.
Jewellers stayed away from the physical market because of
higher prices, but dealers noted safe-haven buying related to
the tension in the Middle East.
"I think no physical buyers want to buy at these levels.
There are concerns about inflation in China, too, but I think
the Chinese are buying gold locally and not from the Hong Kong
market. It seems there's enough supply there," said a dealer in
Hong Kong.
"I think sentiment is a bit mixed. It may want to try $1,400
again but I think physical buyers will only appear at the lower
end. The market is mainly driven by speculators."
China's Ministry of Commerce has asked other ministries to
consider potential cuts in import taxes on a range of goods
including food, two sources said on Thursday, in a move seen
aimed at taming rising inflation.
In other markets, Asian stocks are set to finish their best
week in two months as investors scooped up bargains amid signs
that heavy selling of the past few weeks was drawing to a close.
Precious metals prices 0538 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1384.94 1.64 +0.12 -2.43
Spot Silver 31.67 -0.07 -0.22 2.62
Spot Platinum 1837.24 -5.50 -0.30 3.95
Spot Palladium 844.00 3.03 +0.36 5.57
TOCOM Gold 3718.00 5.00 +0.13 -0.29 26314
TOCOM Platinum 4970.00 2.00 +0.04 5.83 8808
TOCOM Silver 84.30 2.00 +2.43 4.07 1720
TOCOM Palladium 2269.00 -4.00 -0.18 8.20 421
Euro/Dollar 1.3605
Dollar/Yen 83.24
TOCOM prices in yen per gram. Spot prices in
$ per ounce.
(Reporting by Lewa Pardomuan; Editing by Manash Goswami)
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