* Euro's rise on Greece rescue plan lifts gold
* Currency volatility, economic uncertainty support
* Fed Beige Book boosts inflation hedge appeal
* Coming up: U.S. nonfarm payrolls data on Friday
(Recasts, updates quotes, closing prices, adds NEW YORK to
dateline, second byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 3 (Reuters) - Gold rose to 6-1/2
week highs on Wednesday as the euro's recovery against the
dollar amid easing worries about a Greek debt crisis increased
the metal's appeal as a hedge against currency volatility.
Spot bullion has increased for a fifth consecutive session,
as the metal is benefiting not only from the dollar's weakness,
but also from fears over financial instability in general. Gold
priced in euro and sterling both hovered near record highs.
Uncertainty over plans to tackle Greece's fiscal crisis and
over what the next British election may mean for U.K. debt have
heightened volatility in the European currencies, lifting
interest in gold as an alternative asset, analysts said.
"The market is looking for some security with gold," said
Commerzbank analyst Eugen Weinberg. "The problems in the euro
zone, and the problems in Greece, may well pull people into the
gold market as they look for diversification and security."
Gold has traditionally been used as a safe haven in times
of economic and political uncertainty, as the metal's intrinsic
value is not dependent on any paper currency.
Spot gold <XAU=> was at $1,139.65 an ounce at 2:46 p.m. EST
(1946 GMT), against $1,134.50 late in New York on Tuesday. It
hit a high of $1,144.60 earlier in the session, the loftiest
since Jan. 15.
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange settled up $5.90
at $1,143.30 an ounce.
The euro rose after Greece announced plans for a further
$6.55 billion in pay cuts and tax hikes to reduce its crippling
deficit. []
Concern over the fiscal health of peripheral euro zone
economies such as Greece, Italy and Spain have weighed heavily
on the euro this year. It is currently down nearly 5 percent
versus the dollar in 2010.
The euro also benefited on Wednesday from data showing the
U.S. private sector shed 20,000 jobs in February, in line with
expectations. [] The numbers are seen as an important
precursor to key U.S. non-farm payrolls data due on Friday.
[]
Gold's inflation hedge appeal should increase after the
Federal Reserve Beige Book summary showed economic activity
strengthened modestly during February. []
EURO, STERLING GOLD FIRM
Gold prices held near the record highs they hit on Tuesday
in euros and sterling terms, boosted by volatility in the
foreign exchange markets.
"Gold is being used as a bit of an alternative to
currencies," said Citigroup analyst David Thurtell. "It takes
you out of dollar or euro exposure and puts you into a
non-currency."
Euro-priced gold <XAUEUR=R> hit a high of 835.97 euros an
ounce, close to the previous session's record 836.72 an ounce,
while gold priced in sterling <XAUGBP=R> rose as high as 758.99
pounds an ounce, just off its record high of 759.86 an ounce.
SPDR Gold Trust <GLD>, the world's largest gold-backed
exchange traded fund, posted an inflow of about 4.6 tonnes on
Tuesday, its first increase in holdings since Feb. 23.
[]
Among other commodities, oil climbed above $80 a barrel on
the weak dollar and better economic sentiment. []
Silver <XAG=> was at $17.17 an ounce against $16.92, having
earlier touched a five-week high of $17.33.
Platinum <XPT=> was $1,574 an ounce against $1,566.50,
while palladium <XPD=> was $446 against $439.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCJ0> 1143.30 5.9 0.5 1096.20 4.3
US silver <SIK0> 17.329 0.265 1.6 16.845 2.9
US platinum <PLJ0> 1583.50 7.50 0.5 1471.00 7.6
US palladium <PAM0> 450.50 5.65 1.3 408.85 10.2
Prices at 2:27 p.m. EST (1927 GMT)
Gold <XAU=> 1140.20 5.70 0.5 1096.35 4.0
Silver <XAG=> 17.20 0.28 1.7 16.84 2.1
Platinum <XPT=> 1573.00 6.50 0.4 1465.50 7.3
Palladium <XPD=> 447.00 8.000 1.8 405.50 10.2
Gold Fix <XAUFIX=> 1136.50 0.25 0.0 1104 2.9
Silver Fix <XAGFIX=> 17.17 60.00 3.6 16.99 1.1
Platinum Fix <XPTFIX=> 1580.00 1.00 0.1 1466 7.8
Palladium Fix<XPDFIX=> 444.00 0.00 0.0 402 10.4
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
