* Euro zone fiscal woes linger, fuelling safe-haven demand
* Dollar firms versus euro, cappint gains in gold
* Platinum climbs to 7-week high, tracking other metals
(Updates, adds comment, changes dateline from SINGAPORE)
By Jan Harvey
LONDON, March 10 (Reuters) - Gold rose in Europe on
Wednesday as investment interest held firm amid persistent
concerns over the fiscal health of the euro zone, with traders
cheered by the bounce in price from the last session's lows.
An uptick in the dollar capped gains, however. Platinum rose
to seven-week highs at $1,614.50 an ounce, meanwhile, as the
metal chased gains in palladium, which climbed to a two-year
high late last week.
Spot gold <XAU=> was bid at $1,125.50 an ounce at 1041 GMT,
against $1,121.15 late in New York on Tuesday. U.S. gold futures
for April delivery <GCJ0> on the COMEX division of the New York
Mercantile Exchange rose $3.80 to $1,126.10 an ounce.
Fitch Ratings said on Tuesday it still has a negative
outlook on Portugal's credit rating, which heightened concern
that peripheral euro zone economies may face debt problems
similar to those of Greece.
"All the worries about the fiscal situation, and how that is
managed, are being read as positive for gold," said Credit
Agricole analyst Robin Bhar.
"That should become a long-standing issue, as people are
concerned about how governments in the euro zone are handling
the whole fiscal situation."
This put pressure on the euro, which eased against the
dollar. Euro weakness usually puts gold under pressure and while
that factor is capping gains in the metal, for the moment, it is
being outweighed by interest in bullion as a haven from
financial risk. []
Traders were also cheered by the strength of gold's recovery
from lows on Tuesday, when prices briefly slid more than 1
percent as a firmer dollar weighed on the market.
"$1,110 held, so (gold) is looking much better now after
testing the downside," said Commerzbank senior trader Michael
Kempinski.
PLATINUM CLIMBS
Gold demand from India, the world's biggest bullion
consumer, abated on Wednesday as traders awaited price falls
after offtake picked up in the previous session when the metal
touched a two-week low, dealers said. []
On the supply side, metals consultancy GFMS said gold
production from West Africa is set to rise about 30 percent over
the next 4 years, driven largely by higher output from Randgold
<RRS.L> and Iamgold <IMG.TO>. []
Among other commodities, industrial metals prices rose after
well-received imports data from China, while oil recovered
losses as expectations for a gain in U.S. crude stockpiles were
counterbalanced by surging Chinese imports. [] []
Platinum prices rose more than 1 percent to their highest in
seven weeks, boosted by strong buying from Japan in Asian trade
and tracking gains in fellow autocatalyst material palladium and
other industrial metals.
"Owing to their industrial use, silver, platinum and
palladium experienced disproportionally high gains on the back
of the general metal price rally," said Commerzbank in a note.
Both platinum and palladium are benefiting from expectations
that demand from industrial users, chiefly carmakers, will rise.
They are also being underpinned by rising investment demand
after the launch of platinum- and palladium-backed
exchange-traded products in New York earlier this year by a U.S.
subsidiary of London's ETF Securities.
Both products saw inflows on Tuesday. Holdings of ETFS
Physical Platinum Shares <PPLT.P> rose nearly 10,000 ounces to
289,610 ounces, while those of ETFS Physical Palladium Shares
<PALL.P> climbed nearly 15,000 ounces to 504,511 ounces.
Platinum <XPT=> was at $1,606 an ounce against $1,589, while
palladium <XPD=> was at $469.50 against $465. Spot silver <XAG=>
was bid at $17.36 an ounce against $17.23.
For stories from the Reuters Global Mining and Steel summit,
click on []
(Reporting by Jan Harvey; Editing by Amanda Cooper)
