* 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
(Releads, updates prices)
By Jan Harvey
LONDON, March 10 (Reuters) - Gold extended gains in Europe
on Wednesday as the euro turned higher versus the dollar, with
investment interest holding firm amid persistent concerns over
the fiscal health of the euro zone.
Traders were also cheered by the bounce in price from the
last session's lows. 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 $1,126.15 an ounce at 1257 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 $4.30 to $1,126.60 an ounce.
The euro rose 0.1 percent to $1.3612 <EUR=> after hitting a
session low of $1.3546. A softer dollar boosts gold's appeal as
an alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies. []
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."
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
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 $1,603.50 an ounce against $1,589,
while palladium <XPD=> was at $467.50 against $465. Spot silver
<XAG=> was bid at $17.42 an ounce against $17.23.
The ratio of gold to silver prices fell to 64.6 on
Wednesday, its lowest since January 25, meaning silver is
becoming increasingly expensive compared to gold.
"Given the rise in the daily and weekly momentum indicators,
prices could continue to rise, but we expect the Jan 11 high of
$18.85 an ounce to hold and keep the Dec 3 high of $19.42 an
ounce out of play," said Standard Chartered in a note.
For stories from the Reuters Global Mining and Steel summit,
click on []
(Reporting by Jan Harvey; Editing by Keiron Henderson)
