* Gold hits 4-month high in flight to safety, Greece woes
* SPDR gold ETF holdings hit record high above 1,140 T
* Bullion at key technical mark at recent high near $1,160
* Coming up: March consumer prices on Wednesday
(Recasts, adds comments, closing prices, changes dateline from
LONDON)
By Frank Tang
NEW YORK, April 9 (Reuters) - Gold prices rose to their
highest level this year on Friday, above $1,160 an ounce, as a
downgrade of Greece's debt renewed fears over the euro zone's
financial stability, prompting a flight to safer investments.
The metal ended the week about 3 percent higher, which
marked the biggest gain since the week of Jan. 10.
Rising investment demand also underpinned the market, as
holdings of the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD> -- often referred to by its GLD
stock symbol -- rose to a record of more than 1,100 tonnes.
Jason Toussaint, managing director, investment of GLD's
sponsor, World Gold Trust Services, a unit of industry-funded
World Gold Council, said gold is increasingly being used as a
long-term portfolio asset, particularly among institutional
investors, such as pension funds.
"Investors are understanding that the repercussions of the
global crisis are far from over," he said. "It does point
people to focus more on wealth preservation and downside risk
protection, and gold is of course a useful tool to address
those concerns."
Spot gold <XAU=> peaked at a four-month high at $1,164.35
an ounce, the firmest since Dec. 8. It was at $1,159.55 an
ounce at 2:46 p.m. EDT (1846 GMT), against $1,150.15 late in
New York on Thursday.
June gold futures <GCM0> settled up $9 at $1,161.90 an
ounce on the COMEX division of the New York Mercantile
Exchange.
Gold investors took heart on a euro rally after a European
Union source said euro zone leaders had reached a deal on terms
of a possible emergency loan to help Greece manage a worsening
debt crisis. []
Potential currency volatility also increases bullion's
appeal. In addition to a choppy euro, New York Times also
reported this week that China was close to announcing a shift
in currency policy, a sign that Beijing could let the value of
the yuan rise. []
Gold has benefited from a flight to hard assets amid
persistent concerns over the fiscal health of debt-laden Greece
and other smaller euro zone economies such as Portugal, Italy
and Ireland, helping it shrug off dollar strength this week.
Fitch Ratings on Friday cut Greece's credit ratings by two
notches and signaled further downgrades are possible, citing
the intensification of fiscal challenges in the debt-ridden
country. []
KEY TECHNICAL MARK AT $1,160
On charts, Adam Hewison, president of MarketClub.com, said
gold must rise above the $1,160 area or risk retreating.
Rallies in the past several months were met with heavy
resistance at the $1,160 level, Hewison said.
Investment interest in the precious metal has grown as
inflation and sovereign debt fears persist. Barclays Capital
said holdings of the 18 gold-backed exchange-traded products it
tracks set record highs on Thursday.
New York-listed GLD also increased its holdings by nearly
10 tonnes to a record 1,140.433 tonnes on Thursday, its biggest
one-day climb since September. []
Other precious metals also climbed, with silver <XAG=>
rising with gold to $18.41 an ounce, the loftiest price since
Jan. 20. It was last at $18.35 an ounce against $18.04 on
Thursday.
Platinum <XPT=> traded near its highest level since August
2008. It was last at $1,722 an ounce, versus $1,711.50 on
Thursday, while palladium <XPD=> also neared a two-year high,
and was last at $510.50, versus $501.50 a day earlier.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1161.90 9 0.8 1096.20 6.0
US silver <SIK0> 18.351 0.224 1.2 16.845 8.9
US platinum <PLN0> 1727.40 10.30 0.6 1471.00 17.4
US palladium <PAM0> 513.60 10.10 2.0 408.85 25.6
Prices at 3:11 p.m. EDT (1911 GMT)
Gold <XAU=> 1159.95 9.80 0.9 1096.35 5.8
Silver <XAG=> 18.35 0.31 1.7 16.84 9.0
Platinum <XPT=> 1721.50 10.00 0.6 1465.50 17.5
Palladium <XPD=> 510.00 8.500 1.7 405.50 25.8
Gold Fix <XAUFIX=> 1152.50 -3.50 -0.3 1104 4.4
Silver Fix <XAGFIX=> 18.34 36.00 2.0 16.99 7.9
Platinum Fix <XPTFIX=> 1718.00 4.00 0.2 1466 17.2
Palladium Fix<XPDFIX=> 511.00 0.00 0.0 402 27.1
(Additional reporting by Jan Harvey in London; Editing by
Walter Bagley)
