* Weak consumer data boosts gold as alternative asset
* Silver eyes 30-year highs above $21
* Investors on alert for Fed moves next week
(Recasts, adds comments, details, changes byline/dateline,
previous LONDON)
By Frank Tang
NEW YORK, Sept 17 (Reuters) - Gold hit a record high on
Friday for the third time this week as poor U.S. consumer data
and market talk of more quantitative easing put the alternative
asset on track for its largest weekly gain since May.
Silver <XAG=> rose to just below $21 an ounce, approaching
levels not seen since 1980 as gold's rally triggered further
investor speculation that the white metal would continue a
winning streak that began in August.
Gold surged to an all-time peak of $1,282.75 an ounce in
the European session on expectations that the U.S. Federal
Reserve, hoping to stave off double-dip recession, could
announce more quantitative easing -- usually a boon for gold.
After some profit-taking, the metal turned higher again
after data showed consumer sentiment worsened in early
September to its weakest in more than a year. Another report
indicated little underlying U.S. inflationary pressure.
[]
"Gold continues to reflect the overall level of concern.
The weak consumer confidence data was certainly supportive to
the rally in gold," said Frank McGhee, head of precious metals
trading at Integrated Brokerage Services in Chicago.
Spot gold <XAU=> fetched $1,275.55 an ounce at 11:53 a.m.
EDT (1553 GMT), compared with $1,272.20 late in New York on
Thursday. It has gained more than $100, nearly 9 percent, since
the start of August.
U.S. December futures <GCZ0> climbed $3.40 to $1,277.20 an
ounce.
Foreign-exchange volatility also boosted gold's appeal as
an alternative currency, after Japan intervened on Wednesday to
weaken the yen for the first time in six years and the United
States sharpened its tone on China's currency policy.
[]
"It's partly a currency move. There's certainly investor
nervousness about monetary policy around the world since the
yen intervention," precious metals strategist Matthew Turner of
Mitsubishi Corp said.
"A lot of people are sensing a race to the bottom by
central banks to print more of their currency, to reflate their
economies and gold is getting support from that."
The dollar rallied against the euro and the yen as the U.S.
consumer data eased risk appetite against the backdrop of
possible further intervention by the Bank of Japan. []
Dollar sentiment overall has been damaged by speculation
that the Fed could announce more quantitative easing when it
meets on Tuesday.
Quantitative easing is a process by which central banks
attempt to pump money into economies by printing cash and
buying bonds. Excess liquidity can often lead to price
pressures as too much money chases too few goods and services.
SEASONAL DEMAND, GOLD-BUYING EVENTS
September and October are typically seasonally strong
periods for jewelry demand, with a number of major gold-buying
festivals near the year-end in top consumer India, while
Western manufacturers stock up ahead of Christmas.
Also lending background support this week was the
long-expected announcement of AngloGold Ashanti's <ANGJ.J>
capital raising, a key function of which was to buy back its
outstanding gold hedges. []
Eclipsing gold's rally, silver has gained more than 5
percent this week, outperforming the yellow metal's 2.5 percent
increase. Spot silver <XAG=> was up 0.2 percent at $20.77 an
ounce from $20.72 in New York on Thursday.
"The last few months, silver has been benefiting as a
monetary metal like gold, when things are looking bad, and as
an industrial metal when things are looking good. So investors
are very keen," Mitsubishi's Turner added.
However, according to technical analysis, silver is
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," Credit Suisse analyst Tom 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 $1,630 an ounce, its highest since
May 19. It rose to $1,621 from $1,603.65 on Thursday and
palladium <XPD=> edged up to $546.50 an ounce from $544.65.
Prices at 12:09 p.m. EDT (1609 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCZ0> 1278.20 4.40 0.4% 16.6%
US silver <SIZ0> 20.860 0.089 0.4% 23.8%
US platinum <PLV0> 1622.60 10.70 0.7% 10.3%
US palladium <PAZ0> 547.40 -1.95 -0.4% 33.9%
Gold <XAU=> 1276.70 4.50 0.3% 16.4%
Silver <XAG=> 20.83 0.09 0.4% 23.6%
Platinum <XPT=> 1621.00 17.35 1.1% 10.6%
Palladium <XPD=> 546.50 1.85 0.3% 34.8%
Gold Fix <XAUFIX=> 1274.00 -7.50 -0.6% 15.4%
Silver Fix <XAGFIX=> 20.85 9.00 0.4% 22.7%
Platinum Fix <XPTFIX=> 1618.00 1.00 0.1% 10.4%
Palladium Fix <XPDFIX=> 547.00 7.00 1.3% 36.1%
(Additional reporting by Melanie Burton in London; Editing by
Dale Hudson)
