* Gold prices reach highest since early January
* Unrest spreads across Middle East, North Africa
* Gold:silver ratio slips to lowest since 1998
(Updates prices)
By Jan Harvey
LONDON, Feb 21 (Reuters) - Gold prices rose above $1,400 an
ounce on Monday for the first time in nearly seven weeks as
violence flared in north Africa and the Middle East, boosting
interest in the precious metal as a haven from risk.
Tensions have spread across the regions from Egypt and
Tunisia, where protests unseated leaders earlier this month,
threatening the grip of long-entrenched autocratic leaders.
[]
Spot gold <XAU=> rose as high as $1,403.38 an ounce and was
bid at $1,401.30 an ounce at 1240 GMT, against $1,388.58 late in
New York on Friday. U.S. gold futures for April delivery <GCJ1>
rose $13.60 an ounce to $1,402.10, having peaked at $1,404.30.
Gold priced in euros <XAUEUR=R> hit its highest since Jan.
18 at 1,025.85 euros an ounce, and sterling-priced gold
<XAUGBP=R> its highest since Jan. 14 at 865.33 pounds an ounce.
"There is no doubt that the recent move higher across the
precious metals reflects a degree of safe-haven buying as a
result of the unrest in the Middle East," said Daniel Major, an
analyst at RBS Global Banking & Markets.
"If (buying) is not through the exchange-traded funds or a
clear change in the net long on Comex, it is most likely to be
through the physical market -- coin and small bar buying, and I
potentially wouldn't rule out larger purchases by high net worth
individuals on the back of the unrest we're seeing," he added.
"That has clearly been a game-changer in the last couple of
weeks for gold and silver after what was quite a lethargic start
to the year in terms of identifiable investment demand in the
exchange-traded funds."
Holdings of the world's largest gold exchange-traded fund,
New York's SPDR Gold Trust <GLD>, fell to a nine-month low on
Friday at 1,223.098 tonnes, data from the fund showed, even as
prices rallied. []
Turkish Foreign Minister Ahmet Davutoglu said on Monday that
Tunisia's revolution could provide a model for other countries
seeking reform if it can avoid pitfalls on the path to
elections. []
Dozens of people were reported killed in Tripoli overnight
as anti-government protests reached the Libyan capital for the
first time and the building where the country's parliament meets
was ablaze. []
SAFE-HAVENS RISE
The resulting risk aversion sparked buying of assets seen as
a haven from risk. Bund futures rose as tension in Libya sparked
safe-haven flows into German debt, while the Swiss franc rose
against the dollar and euro. [] []
Brent oil prices meanwhile surged nearly $3 a barrel to
2-1/2 year highs as traders eyed unrest in major producer Libya.
[] European shares slipped in response to the tensions, as
investors cut exposure to risk. []
Other precious metals also rallied, with silver touching its
highest in 31 years and palladium a 10-year peak. Silver
outperformed gold, with the number of silver ounces needed to
buy an ounce of gold dropping to around 42, a near 13-year low.
"Precious metals continued to recover as civil unrest
intensified in the MENA region, with silver touching levels not
seen since the peak of the Hunt Brothers squeeze in 1979/80,"
said Morgan Stanley in a note.
"We expect the combination of continued strength in
investment demand and a sustained industrial demand recovery
will support silver... this year before easing amid improved
economic conditions in 2012."
Silver <XAG=> hit a high of $33.50 and was later at $33.44
an ounce against $32.46. Platinum <XPT=> was at $1,842.35 an
ounce against $1,833.50, while palladium <XPD=> peaked at $859
and was later at $855.22 against $848.25.
(Reporting by Jan Harvey; editing by Keiron Henderson)
