* Gold hits record above $1,480/oz on inflation concerns
* U.S. gold specs fall from high, silver lowest since Feb
* Euro zone debt worry seen as ultimately gold-supportive
* Coming up: U.S. housing starts on Tuesday
(Recasts, adds comments, updates market activity, adds links
to graphic)
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 to 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 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 0.9 percent to $1,485.70 an ounce by
3:28 p.m. EDT (1928 GMT), having hit a record $1,487.90. U.S.
gold futures for June delivery <GCM1> settled up $13.60 at
$1,486.
Gold remained far below its all-time inflation-adjusted
high, estimated at almost $2,500 an ounce set in 1980, an era
of Cold War tension, oil shocks and hyperinflation.
(Graphic: http://r.reuters.com/ren88r )
Silver <XAG=> gained 1.4 percent to $42.68, notching a
third straight weekly gain. The gold-to-silver ratio -- showing
the relative strength between the two metals -- fell to its
lowest since the early 1980s.
(Graphic: http://link.reuters.com/vaq98r )
In the week ended April 12, speculators in U.S. gold
futures and options cut their net long positions from the
highest level since October, and they reduced their silver
bullish bets to the lowest since February, a report by the U.S.
Commodity Futures Trading Commission showed. []
(Graphic: http://r.reuters.com/buv87r )
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.
"This should help to ease inflation concerns at the Fed.
With food and energy cutting into consumer spending power, it's
difficult for sellers of other goods and services to pass price
increases through to the consumer," said Nigel Gault, chief
U.S. economist at IHS Global Insight.
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.
A third straight daily gain in U.S. crude oil stoked
inflation worries, as improving consumer confidence and
industrial production boosted the outlook for oil demand.
[]
EUROPEAN DEBT CRISIS EYED
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 precious metals, platinum <XPT=> eased 50 cents
at $1,785.99 an ounce, while palladium <XPD=> gained 0.4
percent to $765.22.
Prices at 3:28 p.m. EDT (1928 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCM1> 1486.00 13.60 0.9% 4.5%
US silver <SIK1> 42.571 0.907 0.0% 37.6%
US platinum <PLN1> 1794.80 -0.80 0.0% 0.9%
US palladium <PAM1> 768.10 -6.15 -0.8% -4.4%
Gold <XAU=> 1485.70 12.80 0.9% 4.7%
Silver <XAG=> 42.68 0.60 1.4% 38.3%
Platinum <XPT=> 1785.99 -0.50 0.0% 1.0%
Palladium <XPD=> 763.47 2.84 0.4% -4.5%
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 Lucia Mutikani in Washington, Jan
Harvey in London; Editing by Dale Hudson)
