* Gold hits highest since Oct 10
* Sterling-priced gold hits record 661.55 pounds/oz
* SPDR Gold Trust bullion holdings rise to all-time high
(Updates throughout, changes dateline, pvs TOKYO)
By Jan Harvey
LONDON, Jan 26 (Reuters) - Gold climbed above $900 an ounce
to its strongest level in more than three months in Europe on
Monday, lifted by interest in bullion as a haven from risk.
Spot gold <XAU=> was $905.90/907.90 an ounce at 1046 GMT, up
from $898.10 in New York late on Friday. Earlier in the session
the precious metal hit $907.40, its highest since Oct 10.
Gold priced in sterling <XAUGBP=R> hit a record 661.55
pounds, while euro-priced gold remained near the all-time high
it hit on Friday, as fears over the global economic slowdown and
volatility in other asset prices spurred buying.
RBS Global Banking & Markets' head of commodity strategy
Nick Moore said factors including falling interest rates, the
reinflation of Western economies and the prospect of lower
supply both from mines and via central bank sales were
supporting gold.
"There is an insatiable thirst for gold at the moment," he
said.
The dollar, whose strength usually weighs on gold, climbed
to a six-week high against the euro on Monday, as investors
worried about the outlook for the banking sector. []
However, other factors outweighed the dollar-euro exchange
rate to support the precious metal. Demand for physical gold
both from investors in smaller products such as coins and bars
and from exchange-traded funds remains firm.
Investors were seeking the safety of physical bullion as
other asset prices met fresh volatility, analysts said.
"In times of economic crisis, falling equity markets and
mounting aversion to risk, physical gold is preferred as the
safest form of investment," Commerzbank analyst Eugen Weinberg
said.
The world's largest gold-backed ETF, New York's SPDR Gold
Trust <GLD>, which issues securities backed by physical stocks
of the precious metal, said its holdings rose 1.6 percent to an
all-time high of 832.57 tonnes on Friday. []
The trust's bullion holdings have climbed more than 52
tonnes or nearly 7 percent since the beginning of the year.
ASIA
Japan's biggest bullion house Tanaka Kikinzoku said its gold
coin sales more than doubled in 2008 as the global financial
crisis unfolded. []
Asian precious metals trading is likely to be muted by the
closure of the Shanghai Gold Exchange on Monday due to the Lunar
New Year holiday.
On the supply side, AIM-listed gold miner Peter Hambro
Mining <POG.L> said its 2008 attributable gold production was up
36 percent at 393,600 ounces, and that it expects its 2009
production to be 460,000-510,000 ounces. []
Among other precious metals, silver <XAG=> rose in line with
gold to $12.03/12.11 an ounce from $11.92.
Platinum <XPT=> firmed to $965/970 an ounce from $955.50 an
ounce in New York late on Friday.
"We would not be surprised to see the gap between platinum
and gold narrow: the ratio stands at about 1.07 at the time of
writing and we have a standing recommendation to buy the
platinum gold spread when the ratio falls below 1.05," UBS
strategist John Reade said in a daily note.
"We believe that in the long term platinum should trade at a
considerable premium to gold and we observe that periods of
platinum's discount to gold tend to be measured in days or weeks
rather than months and years," he added.
Palladium <XPD=> eased to $191.50/196.50 an ounce from
$195.00.
(Editing by Sue Thomas)
