* Gold tackles record highs; SPDR holdings up
* Silver at 2-1/2 year highs, nears 30-year peaks
* Coming up: U.S. Sept housing market index; 1400 GMT
(Updates prices, adds comment, previous SINGAPORE)
By Amanda Cooper
LONDON, Sept 20 (Reuters) - Gold hit a record high for the
fourth day in a row on Monday, boosted by growing expectations
for U.S. interest rates to remain exceptionally low as the
economy struggles, while silver came in range of 30-year peaks.
Data on Friday showed Americans were at their most
pessimistic in over a year this month, as growing fears about
job security and finances undermined U.S. consumer sentiment and
painted a muted picture of price pressures.
This helped reinforce the belief that the Federal Reserve
will signal its intention to resume large-scale purchases of
government bonds to keep interest rates low when it meets on
Tuesday, propelling gold above $1,280.00 for the first time.
Spot gold <XAU=> rose 0.3 percent to $1,280.20 an ounce by
0935 GMT, having hit a record peak of $1,283.35 earlier. U.S.
gold futures for December delivery <GCZ0> rose 0.3 percent to
$1,281.70an ounce.
"Certainly, this will depend on macro data to come, but the
pressure on the U.S. central bank is gradually building and such
a move would be supportive for gold as monetary base expands
further and the dollar weakens," said Andrey Kruychenkov, an
analyst with VTB Capital, in a note.
Confidence in the global economy is flagging and the
prospect of low interest rates and a weaker dollar set a solid
foundation for gold, which holds more appeal in such an
environment as it bears no yield of its own.
The dollar slipped broadly on Monday, under pressure from
speculation about the chances for a resumption of quantitative
easing -- the practice of buying debt to restrict interest
rates. This in turn boosted European equities. [] []
16 PCT AND CLIMBING
Spot gold prices have risen by more than 16 percent this
year, driven by the desire among investors for a safe store of
value in light of major currencies, equities and bonds becoming
incresaingly volatile.
Reflecting keen investor interest in gold was another rise
in holdings of bullion in the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, which rose by
another 6 tonnes on Friday, bringing net inflows to 2.0 tonnes
so far this month.
Adding to the economic uncertainty, a range of European data
on manufacturing, consumer confidence and Germany's business
climate could signal a slowdown in the recovery process.
On the physical market, demand was expected to stay strong
in the next few months, especially out of China, dealers said.
Silver prices, which have risen by 17 percent in the last
five weeks alone, were less than 1.5 percent below their highest
level in nearly 30 years on Monday.
Silver has acted as a cheap alternative to gold for
investors who have sought out safe-haven assets in which to park
their cash, and even more so as gold has hit record highs this
month, yet has also drawn strength from the .
"Silver appears to be doing better than gold at the minute
on the back of a combination, not just investment demand, but
also industrial demand as the cycle improves for all the
electronics companies," said Natixis strategist Nic Brown, who
has a more downbeat outlook for the gold price.
"It's another little indication that things don't seem to
add up properly when you look at the markets in total. The rally
that continues to take place across the precious metals, led by
gold, is somewhat at odds with what we perceive to be a gradual,
if not a spectacular, recovery in the global economy," he said.
Spot silver <XAG=> rose 0.5 percent to $20.87 an ounce,
after reaching $20.99 on Friday, its highest in the past 2-1/2
years when it touched $21.24, its highest since October 1980.
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its holdings rose to 9,381.74
tonnes by Sept 17 from 9,343.69 tonnes on Sept 16.
[]
The platinum group metals rose in line with the rally in
gold. Platinum <XPT=> held around its highest in four months,
quoted at $1,620.00 an ounce, up from $1,60.55 on Friday, on
track for a 6.6 percent gain this month, which would be its
largest since November 2009.
Palladium <XPD=> hovered a few dollars below last week's
five-month highs, quoted at $541.50, against $539.88.
(Additional reporting by Rujun Shen in Singapore)
(Editing by William Hardy)
