* Gold hits second record in a row as dollar slides
* Ongoing unrest in Mideast, North Africa add momentum
* Silver jumps to highest since early 1980
(Updates prices)
By Amanda Cooper and Jan Harvey
LONDON, April 6 (Reuters) - Gold hit a record high for a
second straight session on Wednesday, powered by investor demand
for safe-haven assets and a slide in the dollar in anticipation
of a euro zone rate hike, while silver hit fresh 31-year peaks.
Unrest across the Arab world and unease over the euro zone's
debt finances have also encouraged inflows of cash into gold,
which has risen by more than 2 percent this week.
Spot gold <XAU=> hit a record $1,461.91 an ounce and was bid
at $1,460.60 an ounce at 1422 GMT, against $1,450.60 late in New
York on Tuesday. U.S. gold futures for June delivery <GCv1> rose
$9.60 an ounce to $1,462.10.
"We have been seeing frenzied buying as markets scythed
through the all-time high levels," said Pradeep Unni, senior
analyst at Richcomm Global Services. "Fundamentals are still
bullish, with geopolitical instability supporting the markets
substantially."
Oil prices were near 2-1/2 year highs as unrest continued
across the Middle East and North Africa, keeping gold well-bid.
Investors were also nervous over euro zone debt, becoming
increasingly convinced Lisbon will have to seek a bailout.
[] []
The focus this week is on Thursday's three central bank
policy meetings, at which the European Central Bank is seen
almost certain to raise rates, while the Bank of Japan and the
Bank of England are expected to hold their fire. []
The euro <EUR=> hit its strongest in over a year versus the
dollar in anticipation of an ECB rate hike. While hikes usually
pressure non-interest bearing assets like gold, pressure on the
dollar resulting from the move is expected to outweigh that.
"It is unquestionable that the demand for precious metals
derives from the devaluation of the leading currencies -- the
dollar, the pound and the euro," said Angelos Damaskos, a fund
manager at Sector Investment Managers.
"Investors are looking for an alternative store of value."
NO CHANGE FROM THE FED
The minutes from the U.S. Federal Reserve's most recent
meeting, released on Tuesday, did not contain anything to
suggest the central bank would end its $600 billion bond buying
programme ahead of time, which some had mooted. <nFEDAHEAD>
Record-high food prices and rising oil prices have stoked
inflationary pressures around the world, adding to the case for
owning gold, which can help mitigate the impact of rising price
pressures on an investment portfolio.
The world's central banks are tackling inflation by
tightening monetary policy -- a potential negative to gold,
which bears no yield.
But most benchmark interest rates, when adjusted for
inflation, will remain in negative territory, including those in
China, which raised rates on Tuesday for the fourth time since
October. []
Reflecting the pick-up in investor demand for gold was the
first inflow of metal into the SPDR Gold Trust <GLD>, the
world's largest exchange-traded fund, since March 16. []
Holdings of silver in the world's largest ETF, the iShares
Silver Trust <SLV> are at a record 11,162.45 tonnes, having
risen by more than 240 tonnes so far this year.
Silver has reaped the benefits of investor demand for
safe-haven assets and protection from inflation and on Wednesday
rose to its highest level since January 1980.
Spot silver <XAG=> was last at $39.67 an ounce, having risen
earlier by more than 1 percent to $39.75. Spot platinum <XPT=>
was last up 1.2 percent at $1,806.99 an ounce, while palladium
<XPD=> was up 0.7 percent at $791.63.
(Editing by Alison Birrane)
