* Gold to hover around $1,452-technicals []
* Coming Up: U.S. Midwest manufacturing; 1330 GMT
(Updates prices, adds silver ratios)
By Lewa Pardomuan
SINGAPORE, April 6 (Reuters) - Gold held on Wednesday near a
lifetime high hit in the previous session as lingering worries
about inflation and tensions in the Arab world offset China's
latest move to raise interest rates.
Silver hit another 31-year peak as the metal attracted
interest from investors looking for a cheaper alternative to
gold as a hedge against inflation. The gold:silver ratio dropped
to a 28-year low at 36.93.
Spot gold added $2.90 an ounce to $1,453.50 by 0601
GMT -- not far from a record of $1,456.85 hit on Tuesday on
rallies in corn and oil prices and a downgrade in Portugal's
credit rating that highlighted euro zone debt worries.
"Gold is still looking to hit another record. Tensions in
the Middle East and North Africa are not solved yet. Secondly,
there are new uncertainties in the euro zone. These all will
benefit gold," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
"The only thing is that the increase in Chinese interest
rates will be a negative factor for a little while."
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust , said its holdings inched up to 1,212.745
tonnes by April 5 from 1,211.229 tonnes on March 31.
Spot gold may hover around $1,452 per ounce for one
trading session before climbing towards $1,477, according to
Wang Tao, a Reuters market analyst for commodities and energy
technicals.
For a 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT1/20110604085510.jpg
U.S. gold futures for June rose $2.50 an ounce to
$1,455.0 an ounce.
China's central bank raised interest rates on Tuesday for
the fourth time since October, underlining Beijing's
determination to clamp down on inflation. []
The increase comes before an expected rate hike by the
European Central Bank on Thursday -- which would be the first
since the global financial crisis, showing how inflation is
rising to the top of the global policy agenda.
China's interest rates hike often triggers fears of a
slowdown in the country's demand for commodities, including gold
and industrial metals, but London copper futures firmed on
Wednesday and ignored Beijing's latest move.
The 25 basis point rise announced by Beijing was viewed as
just the latest step in a tightening cycle which has been going
on for some time and was expected to continue.
Investors will still focus on the unrest in the Middle East
and North Africa, which has also spurred buying in silver and
pushed up oil prices. []
Spot silver rose to as high as $39.42 an ounce, its
highest level since early 1980, extending Tuesday's gains.
"There's buying in silver but we don't really know whether
it's coming from China or anywhere else. We can say silver is
cheaper to buy compared to gold," said a dealer in Hong Kong.
"Silver will go up to $40 and it could rise to $100 in the
next few years."
Other dealers said India showed some interest in silver
during the wedding season, when parents give jewellery, mostly
gold, to their daughters.
In other markets, the yen fell as the Bank of Japan began a
meeting on Wednesday that may signal its readiness to further
loosen monetary policy to support the earthquake-hit economy,
while Asian stocks were muted after the interest rate rise in
China.
Precious metals prices 0601 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1453.50 2.90 +0.20 2.40
Spot Silver 39.37 0.14 +0.36 27.58
Spot Platinum 1794.24 8.49 +0.48 1.51
Spot Palladium 785.25 -1.13 -0.14 -1.78
TOCOM Gold 3993.00 87.00 +2.23 7.08 74007
TOCOM Platinum 4954.00 83.00 +1.70 5.49 16036
TOCOM Silver 108.10 3.00 +2.85 33.46 3002
TOCOM Palladium 2163.00 23.00 +1.07 3.15 449
Euro/Dollar 1.4263
Dollar/Yen 85.24
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
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