PRECIOUS-Gold hits record $1,300/oz; silver at 30-yr high

                                
 * LBMA delegates see gold above $1,400, Barrick at $1,500/oz
                                
 * Charts suggest correction in the short term
                                
 * Dollar dives to a five-month low vs euro
                                
 
                                
 (Updates prices)
                                
 By Humeyra Pamuk
                                
 LONDON, Sept 27 (Reuters) - Gold powered to a record high at
$1,300 an ounce on Monday as investors poured cash into the
market on worries about global economic health and the
possibility of further quantitative easing to stimulate growth.
                                
 Silver, often considered the poor man's gold, rose to a
30-year high as investors also chased a cheaper alternative. The
metal has gained nearly 30 percent this year.
                                
 Fund managers and industry experts say gold's rally has
further to run in the longer term because it provides a hedge
against inflation amid expectations that central banks worldwide
could resort to quantitative easing to support economies.
                                
 Spot gold <XAU=> firmed to $1,296.45 an ounce by 1610 GMT,
after hitting a historic $1,300 an ounce and versus $1,295.60
quoted late in New York on Friday.
                                
 "Momentum is still very much in favour of gold," said Jesper
Dannesboe, senior commodity strategist at Societe Generale. "I
wouldn't dare go against it and definitely wouldn't want to be
short. There's good appetite to buy," he said.
                                
 Bullion's rally accelerated last week after the U.S. Federal
Reserve signalled its readiness to pump billions of dollars into
the economy through purchases of government debt, a process
known as quantitative easing. [ID:nN20109053] [ID:nN21167941]
                                
 "Every country in the world is giving signals that it could
print money ... what else are you going to trust apart from
gold," said Sean Corrigan, chief investment strategist at
Diapason Commodities Management.
                                
 The Fed's statement hit the dollar, which dropped on Monday
to a five-month low versus the euro, offering further support
for gold. [FRX/]
                                
 U.S. gold futures for December delivery <GCZ0> rose $2.1 an
ounce to $1,300.10 an ounce, within sight of an all-time high at
$1,301.60 hit on Friday.
                                
 Industry experts see fresh highs for bullion. Delegates at
the London Bullion Market Association annual conference forecast
a price of $1,406 an ounce by September 2011. [ID:nLDE68Q0JF]
                                
 Barrick Gold <ABX.TO>, the world's biggest miner of the
yellow metal, said bullion could exceed $1,500 an ounce next
year. [ID:nLDE68Q0QM]
                                
 Central banks' capping their gold sales could be another
factor supporting prices. On Monday Germany's Bundesbank said it
would keep its gold sales to a minimum in the next 12 months.
[ID:nFAE005806]
                                
 
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a graphic on timeline of gold, click:
http://graphics.thomsonreuters.com/10/GLD_TMLN.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 
                                
 TECHNICAL RESISTANCE?
                                
 For the shorter term, charts show the bullion rally might
face resistance at around $1,315-1,325 an ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
For a technical analysis on gold, click: [ID:nSGE68Q022]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 "I wouldn't call it a safe trade, because everyone has it
now," Dannesboe said. "It's been running for quite some time. I
believe a correction is due."
                                
 A potential correction could be limited, traders said, with
the physical market still buoyant despite record high prices.
                                
 "There is buying even today despite gold touching $1,300 as
the rupee is in a supportive mode," said Pinakin Vyas, assistant
vice-president with IndusInd Bank. "The buying momentum would
continue on upcoming festivals." [ID:nSGE68Q0CU]
                                
 Silver <XAG=> jumped to its highest in three decades at
$21.61 an ounce.
                                
 "The medium-term outlook for silver remains positive in our
view and we therefore raise our medium-term price target to $25
an ounce," said metals strategist Michael Widmer at Bank of
America Merrill Lynch in a research note. 
                                
 The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its holdings rose to a record
high at 9,613.02 tonnes by Sept 24 from 9,582.59 tonnes on Sept
23. [ID:nSGE68Q01C]
                                
 Silver's main sources of demand are for use in industrial
applications such as semi-conductors and jewellery.
Spot platinum <XPT=> was at $1,629 an ounce versus Friday's
last quote of $1,637.70 an ounce, while spot palladium <XPD=>
was at $558 an ounce versus $556.70 an ounce.
                                
 (Additional reporting by Lewa Pardomuan in Singapore,
Editing by Jane Baird)