* Premiums for gold bars in Tokyo jump $1/oz
* Violence continues to simmer in Libya, Bahrain
* European leaders agree to strengthen bailout fund
(Updates prices, adds detail)
By Jan Harvey
LONDON, March 14 (Reuters) - Gold rose in Europe on Monday,
recovering some of last week's one percent losses, as the impact
of an earthquake in Japan added to upward pressure on the metal,
driving prices towards recent record highs.
Spot gold <XAU=> was bid at $1,427.51 an ounce at 1212 GMT
against $1,417.70 late in New York on Friday, within sight of
the record $1,444.40 it hit last week. U.S. gold futures for
April delivery <GCJ1> rose $6.00 to $1,427.80.
Oil prices tumbled, stock markets fell and the yen retreated
from record highs against the dollar after the Bank of Japan
announced a series of policy easing measures to shore up the
economy in the wake of the disaster. [] [] []
Thousands in Japan have been killed or displaced by the
earthquake on Friday and subsequent tsunami.
"Japan is another risk element in a plethora of events which
have been important in the minds of investors in the past
quarter," said Deutsche Bank analyst Daniel Brebner.
"You have the Middle East/North Africa situation, the
peripheral euro zone debt issues which seem to be re-emerging,
there are questions with respect to China raising interest rates
near term, and there are municipal issues in the United States,
particularly on debt."
"This is all creating an environment where there appears to
be support for precious metals, and gold in particular."
Rescue workers combed the region north of Tokyo for
survivors and struggled to care for millions of people without
power and water in what Prime Minister Naoto Kan has dubbed his
country's worst crisis since World War Two. []
Infrastructure was crippled across much of the northeast,
cost estimates of the disaster leapt to as much as $170 billion
and analysts said the economy may return to recession.
Premiums for gold bars in Tokyo jumped to their highest
since February at $1 an ounce versus spot London prices, from
zero last week, dealers said. []
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CRISIS POINT
"This new crisis adds to the geopolitical/oil crisis already
in the background of global markets," said Societe Generale in a
note. "This event may contribute to rising fears of inflation,
and may reinforce central banks dilemma, between policy
tightening and a wait-and-see attitude."
"No doubt in our minds this will reinforce the Fed's path to
stay with their zero rate policy for some time in spite of the
ECB," it added.
Elsewhere unrest in the Middle East and North Africa
continued to spread, with a Saudi source saying 1,000 Saudi
soldiers have entered the island state of Bahrain after
protesters there took to the streets. []
As Libyan leader Muammar Gaddafi's troops battled rebel
fighters for control of the strategic oil town of Brega, France
stepped up efforts to persuade world powers to impose a no-fly
zone over the country. []
Violence which has spread from Egypt and Tunisia across the
Middle East this year was a major factor driving gold to record
highs, and precipitated a spike in oil prices.
In Europe, analysts said they saw little reaction in the
gold price from this weekend's agreement among European leaders
to strengthen the euro zone bailout fund, a move designed to
address the bloc's year-long debt crisis. []
"From gold's perspective, Saturday's agreement represents a
positive surprise that should help the euro but may in initial
assessment present less immediate need for additional gold long
exposure," said UBS in a note.
Among other precious metals, silver <XAG=> was bid at $36.12
an ounce versus $35.83, platinum <XPT=> at $1,760.50 an ounce
against $1,778.50 and palladium <XPD=> at $754.97 against $757.
(Editing by Jason Neely)
