* Gold hits record above $1,480/oz on inflation fears
* Euro zone debt worry seen as ultimately gold-supportive
* Coming up: U.S. housing starts on Tuesday
(Recasts, adds comments, updates market activity, changes
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, April 15 (Reuters) - Gold rose 1 percent to a
record and silver soared on Friday, as inflation worries amid a
crude oil rally and a downgrade of Ireland's sovereign debt
powered bullion toward its fifth consecutive weekly gain.
Silver rose to its highest in 31 years on speculative
buying and tight supplies, and as data showing rising U.S.
consumer prices prompted investors to buy precious metals.
Silver's outperformance over bullion also sent the gold/silver
ratio below 34 for the first time in nearly 30 years.
"People are buying gold and silver as a protection against
inflation. If the Fed doesn't start raising rates, inflation is
really going to hit hard and cripple the economy," said Miguel
Perez-Santalla, vice president of sales at Heraeus Precious
Metals Management.
Spot gold <XAU=> rose 0.8 percent to $1,484.10 an ounce by
12:39 p.m. EDT (1639 GMT), having hit a record $1,487.39. U.S.
gold futures for June delivery <GCM1> rose $12.40 to
$1,484.80.
Silver <XAG=> gained 1 percent to $42.51. The
gold-to-silver ratio -- showing the relative strength between
the two metals -- fell to its lowest since the early 1980s.
The small rise in U.S. core inflation, and data showing
moderation in long-term inflation expectations may be seen as
vindication for Federal Reserve officials who have viewed the
recent energy price spike as having a temporary effect.
"The Fed is not going to see inflation as a threat so they
have the freedom to keep interest rates low longer," said David
Wyss, chief economist at Standard and Poor's in New York.
Gold prices have almost doubled since the Fed cut interest
rates to the bone in 2008 in an attempt to shock the economy
back to life after the worst financial crisis since the Great
Depression.
Gold also drew support from safe-haven bids on worries over
the euro zone financial crisis, after more talk that Greece may
be set to restructure its debt and a Moody's downgrade of
Ireland. []
"The market has been reacting to (the credit issues in
peripheral Europe) by looking for ways to protect themselves
from these types of risks, and gold is seen as a way to do
that," Deutsche Bank analyst Daniel Brebner said.
Brebner said gold would benefit if there were another
bailout in Europe and if European Union monetary policy
remained accommodative because of fiscal troubles in the bloc.
Among other commodities, U.S. crude oil rose for a third
straight day, as improving consumer confidence and industrial
production boosted the outlook for oil demand. []
Gold largely ignored news Goldman Sachs had recommended
investors go underweight commodities over a three- to six-month
horizon, echoing its call from Monday, saying oil prices were
higher than justified by current supply and demand.
[]
Among other precious metals, platinum <XPT=> eased 25 cents
at $1,786.24 an ounce, while palladium <XPD=> gained 0.6
percent to $765.22.
Prices at 12:39 p.m. EDT (1639 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCM1> 1484.80 12.40 0.8% 4.5%
US silver <SIK1> 42.530 0.866 2.1% 37.5%
US platinum <PLN1> 1793.00 -2.60 -0.1% 0.8%
US palladium <PAM1> 767.85 -6.40 -0.8% -4.4%
Gold <XAU=> 1484.10 11.20 0.8% 4.6%
Silver <XAG=> 42.51 0.43 1.0% 37.8%
Platinum <XPT=> 1786.24 -0.25 0.0% 1.1%
Palladium <XPD=> 765.22 4.59 0.6% -4.3%
Gold Fix <XAUFIX=> 1476.75 4.25 0.3% 4.7%
Silver Fix <XAGFIX=> 42.61 194.00 4.8% 39.1%
Platinum Fix <XPTFIX=> 1787.00 3.00 0.2% 3.2%
Palladium Fix <XPDFIX=> 772.00 3.00 0.4% -2.4%
(Additional reporting by Jan Harvey in London; Editing by Dale
Hudson)
