* Gold hits 1-mth high in dollar terms, record peak in euros
* SAfrica says royalties will be levied on mineral exports
* Pension funds starting to invest in gold-WGC
* Indian gold imports seen rebounding in 2010
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Feb 17 (Reuters) - Spot gold hit a one-month peak
and euro-priced bullion rose to record highs in Europe on
Wednesday, supported by strong investment interest and news that
South Africa is to levy royalties on minerals exports.
Spot gold rose as high as $1,126.85 an ounce, its highest
since Jan. 20, while euro-priced gold <XAUEUR=R> rose to a
record 820.84 euros an ounce.
Spot gold <XAU=> was bid at $1,120.60 an ounce at 1334 GMT,
against $1,118.95 late in New York on Tuesday. U.S. gold futures
for April delivery <GCJ0> on the COMEX division of the New York
Mercantile Exchange rose $5.70 to $1,125.00 an ounce.
"We have seen stock markets rising in Europe and U.S. stock
futures are pointing to a higher opening," said Peter Fertig, a
consultant at Quantitative Commodity Research. "This indicates
that investors are willing to take on more risk."
He said investment demand was also starting to pick up
momentum. "If new investors enter the market, that reassures
other investors that the correction may be over," he added.
The euro fell versus the dollar on Wednesday as traders took
profits from a short-covering rally in the single currency
following big gains the previous day, but gold has broken its
usual inverse correlation with the U.S. currency. []
Commodities in general and gold in particular are benefiting
from fresh investment. Billionaire investor George Soros' hedge
fund more than doubled its bet on the price of gold during the
fourth quarter, an SEC filing showed on Tuesday. []
Pension funds started investing actively in gold last year
viewing the metal as a safe long-term investment, the head of
the World Gold Council told Reuters. []
"Investment demand from the United States and a lack of
selling out of Asia are pushing gold up," said Standard Bank
analyst Walter de Wet, adding that a fall in net long positions
in New York gold futures suggested gold had room to rise.
"For most of these commodities, speculative length has
declined substantially, so there is room for more money to flow
in," he said.
OIL CLIMBS
Among other commodities, oil prices extended the previous
session's 3.9 percent gains towards $78 a barrel. Gold tends to
track crude prices, as the metal can be bought as a hedge
against oil-led inflation. []
Commodities also benefited from a return in risk appetite,
as reflected in a rise in equity markets. European stocks
advanced to a two-week high on Wednesday, after Asian shares
climbed to a three-week peak. [] []
The World Gold Council said in its hotly-anticipated Gold
Demand Trends report for the fourth quarter of 2009 that
investment appetite for gold was expected to stay firm, though
overall gold demand fell 11 percent in 2009. []
India remained the world's number one gold consumer, it
said, with fourth-quarter consumption rising 13 percent to 180.7
tonnes year-on-year as wedding and festive demand peaked.
India's gold imports for 2010 may rebound to 550 tonnes as
prices steady and the economy revives, a senior official at a
trade body told Reuters on Wednesday. []
On the supply side, South Africa said in its 2010 Budget
Review on Wednesday that it will from March 1 this year levy
mining royalties that were postponed due a recession last year.
South Africa is the second largest gold producer. []
Among other precious metals, silver <XAG=> was at $16.16 an
ounce against $16.12, platinum <XPT=> was at $1,538.50 an ounce
against $1,118.95, and palladium <XPD=> at $437 against $430.50.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
