* Safe-haven bid helps gold but investors wary
* Palladium spec holdings drop sharply
* Coming up: U.S. existing home sales, Feb; 1400 GMT
(Updates throughout; previous SINGAPORE)
By Amanda Cooper
LONDON, March 21 (Reuters) - Gold rose for a fourth day on
Monday, driven by concern over the impact to global growth from
the devastation in Japan, while western air attacks on Libya
added to investor uncertainty.
Hopes of progress in averting a nuclear disaster at a
Japanese power station damaged by the earthquake and subsequent
tsunami 10 days ago helped soothe the equity markets, but there
remained enough doubt over the longer-term hit to the world's
third largest economy to encourage buying of gold.
The gold price <XAU=>, which is set for its tenth
consecutive quarterly gain, was last up 0.6 percent at $1,427.61
an ounce by 1035 GMT, while most-active U.S. April futures
<GCv1> were up 0.8 percent at $1,427.20.
Last week, gold fell by as much as 2.6 percent as the
unfolding situation in Japan triggered a wave of selling in
higher-risk assets, prompting investors to liquidate their
bullion holdings to cover losses in other markets and analysts
said the high level of risk aversion might see a repeat of this.
"It's happening against a backdrop of elevated uncertainty
from numerous places, which should give these safe-haven type
commodities a bid," said Saxo Bank senior manager Ole Hansen.
"As long as we have this tendency towards risk aversion in
the market, gold will be struggling. It's such a high percentage
of the total investment in commodities, so if there is anything
to be reduced, gold is often in the firing line in that
respect."
Gold usually benefits from periods of heightened risk
aversion, but since the Japanese earthquake, which struck on
March 11 and is feared to have killed over 20,000, the price has
fallen by more than 3 percent.
CRUDE UP
On Monday, Brent crude oil climbed 1.5 percent as a result
of the rising tension in Libya, also helping to buoy the price
of gold, which is used as a hedge against inflation. []
With unrest spreading in Yemen and Syria, western warplanes
and missiles hit Libya over the weekend in a bid to force leader
Muammar Gaddafi to end attacks on civilians. []
"Obviously the tensions in the Middle East, coupled with the
significantly weak dollar against the euro, help give gold the
current boost," said Darren Heathcote, head of trading at
Investec Australia.
"If the dollar remains weak and we get further unrest in the
Middle East, there is a very reasonable chance for gold to test
the record high," said Heathcote.
The dollar index <.DXY> declined to its lowest since the end
of 2009, after the euro hit four-month highs against the dollar
as the euro zone looked set to officially agree on details of
bolstering a bailout fund at the March 24-25 summit. []
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Wang Tao's 24-hour gold outlook:
http://graphics.thomsonreuters.com/WT1/20112103091452.jpg
Top news on Japan: []
Top news on Middle East unrest: []
Graphic on CFTC's weekly speculators gold position:
http://graphics.thomsonreuters.com/F/08/CFTC_GOLD180311.gif
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Reflecting the pick-up late last week in investor appetite
for gold, holdings of the metal in the world's largest
bullion-backed exchange traded funds, the SPDR Gold Trust <GLD>,
rose to their highest in 5-1/2 weeks.
Holdings of gold in the six major ETFs tracked by Reuters
are set for a rise by over half a million ounces this month,
although in the quarter so far, holdings have fallen by 2.13
million ounces. []
Spot silver <XAG=> climbed 2.2 percent to $35.80 an ounce,
making it the top gainer in the precious metals complex. Silver
prices are on track for a ninth successive quarterly gain, up by
16.1 percent in the first three months of the year.
Spot palladium <XPD=> was last up 1.6 percent at $739.72 an
ounce, but is set for a near-8 percent decline this quarter,
having come under pressure from investors concerned about the
impact of the Japanese earthquake and soaring energy prices on
the broader economy.
Data from the Commodity Futures Trading Commission last week
showed the largest weekly decline in speculative holdings of
palladium since at least 1995, bringing the net non-commercial
futures position to 1.12 million ounces, its lowest since
October 2009.
Spot platinum <XPT=> was last up 1.2 percent at $1,737.24 an
ounce.
(Additional reporting by Rujun Shen in Singapore; editing by
James Jukwey)
