* Gold hits two-week high, PGMs loftiest in over 20 months
* Fresh fund money lifts commodities, equities
* Gold mining stocks outperform gold bullion
* Coming up: U.S. March nonfarm payrolls on Friday
(Recasts, updates prices, market activity to close; new
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, April 1 (Reuters) - Gold rose on Thursday to a
two-week top and platinum group metals rallied to their highest
in more than 20 months as fresh investment money poured into
commodities and other asset classes across the board.
A shutdown this week of a smelter at the world's third
biggest platinum producer, Lonmin <LMI.L>, also buoyed platinum
to its highest since August 2008 and palladium to its strongest
since March 2008. []
Rick Bensignor, chief market strategist of Execution Noble
LLC, said gold was boosted by euro's gains and its ability to
hold above key support at $1,095. He also cited a sharp rally
in gold equities on Thursday.
"If the stock market rallies strongly, gold stocks should
outperform bullion. I think the mentality in the marketplace
right now has shifted to just buying every dip."
A gauge of gold mining stocks, Arca Gold BUGS index <.HUI>,
jumped more than 5 percent, surpassing the 1 percent gain in
bullion.
Spot gold <XAU=> rose to $1,127.75 an ounce, its highest
since March 17, and was at $1,123.95 an ounce at 2:59 p.m. EDT
(1859 GMT), versus $1,112.80 an ounce late in New York on
Wednesday.
On technical charts, Thursday's rally lifted gold prices
above all its major moving averages. Some analysts think a
market is overbought when its prices rise above moving
averages.
U.S. June gold futures <GCM0> settled up $11.60 an ounce,
or 1 percent, at $1,126.10 an ounce on the COMEX division of
the NYMEX.
The bullion market took heart as the euro <EUR=> rallied
against the dollar on quarterly positioning and as investors
looked ahead to the U.S. non-farm payrolls report on Friday.
[]
"It's benefiting from the beginning of the quarter with new
fund money and fresh buying coming in," said Jesper Dannesboe,
senior commodity strategist at Societe Generale.
Investor interest looked to be the theme across several
commodity markets, where copper touched a 20-month high and oil
rallied to an 18-month peak. []
"Still not big volumes but enough to push it higher. Also
increasing is the number of investors and speculators thinking
that 'the base metals are going higher so maybe there's some
upside in gold'," said Dannesboe.
Bullion ended the first quarter just below 2 percent higher
on currencies volatility related to euro zone debt and firm
stock markets, but it has struggled to sustain gains since
hitting a record above $1,200 an ounce last December.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a factbox on how much commodities gained in the first
quarter, click on []
For a graphic on first quarter price performances, click:
http://graphics.thomsonreuters.com/310/CMD_Q1PRF0310.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
DOLLAR IS UP, SO IS GOLD!
Analysts look divided on gold's prospects. Some believe
bullion's gains will be capped due to the strong outlook of the
dollar, but others feel that relationship is no longer valid.
"Gold versus euro/dollar is broken, if you look longer
term. It could be the case for intra-day movements maybe,"
Dannesboe said. "We think this year dollar is going up and gold
is going up."
Analysts are expecting the government payrolls report on
Friday to show the economy added 190,000 jobs in March, albeit
aided by temporary government hiring for the 2010 U.S. Census.
Spot platinum <XPT=> was at $1,662.50 an ounce versus
Wednesday's $1,641.50 an ounce while palladium <XPD=> was at
$486.50 an ounce versus $477.50.
Palladium and platinum ended the first quarter 17 percent
and 12 percent higher respectively, surpassing the single-digit
gains posted by gold and silver.
Palladium and platinum prices began to rally after ETF
Securities Ltd. launched the first U.S. PGM exchange traded
funds in early January, which now have about 900,000 ounces of
the combined metals.
A recovering auto industry led by China is also another
factor boosting platinum group metals (PGM) prices.
Silver <XAG=> was at $17.82 an ounce, after hitting $17.97
an ounce, its highest in 10 weeks, compared with Wednesday's
$17.46 an ounce.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1126.10 11.6 1.0 1096.20 2.7
US silver <SIK0> 17.890 0.364 2.1 16.845 6.2
US platinum <PLN0> 1675.60 28.70 1.7 1471.00 13.9
US palladium <PAM0> 491.35 11.40 2.4 408.85 20.2
Prices at 3:18 p.m. EDT (1918 GMT)
Gold <XAU=> 1115.65 13.15 1.2 1096.35 1.8
Silver <XAG=> 17.54 0.29 1.7 16.84 4.2
Platinum <XPT=> 1645.00 28.50 1.8 1465.50 12.2
Palladium <XPD=> 477.00 10.500 2.3 405.50 17.6
Gold Fix <XAUFIX=> 1109.50 2.50 0.2 1104 0.5
Silver Fix <XAGFIX=> 17.50 9.00 0.5 16.99 3.0
Platinum Fix <XPTFIX=> 1645.00 4.00 0.2 1466 12.2
Palladium Fix<XPDFIX=> 479.00 0.00 0.0 402 19.2
(Additional reporting by Humeyra Pamuk in LONDON)
(Editing by Rene Pastor)
