PRECIOUS-Dollar pushes gold to record; palladium at 9-yr high

                                
 * Gold at new record highs just below $1,350.00
                                
 * Palladium at 9 year highs.
                                
 * Coming up: U.S. ADP national employment July; 1215 GMT
                                
 
                                
 (Updates prices)
                                
 By Amanda Cooper
                                
 LONDON, Oct 6 (Reuters) - Gold rose to a second successive
record high on Wednesday, boosted by investors seeking to profit
from weakness in the dollar and the U.S. economy, while
palladium hit its highest level in nine years.
                                
 Gold has touched all-time highs in eight out of the last 10
trading sessions, fuelled by the decline in the dollar, which is
now at eight-month lows against the euro <EUR=>, which has
profited from weakness in the U.S. currency and from the
European Central Bank giving no hint that it could ease policy.
                                
 Spot gold <XAU=> rose as high as $1,349.80 an ounce earlier
in the day, before easing back to $1,346.05 by 1150 GMT, still
up from $1,338.70 late in New York on Tuesday.
                                
 U.S. gold futures <GCZ0> also hit a fresh all-time high of
$1,351 an ounce and traded up $5.4 at $1,345.00 an ounce.
                                
 "We've seen this huge move in the euro because, essentially,
it's thought the U.S. will do more quantitative easing, the ECB
is trying to pull back from that and headlines such as 'IMF
warns of currency wars' is all grist for the mill for gold
really," said Matthew Turner, analyst at Mitsubishi.
                                
 International Monetary Fund Director Dominique Strauss-Kahn
said in comments published on the FT website on Tuesday that
countries risk undermining the global economic recovery if they
use their currencies to boost domestic growth. [ID:nLDE6942A2]
                                
 Economic uncertainties and a weak dollar have helped gold
rally 8 percent from a month earlier and 23 percent so far this
year. Traders and analysts expected the momentum to stay after a
surprise interest rate cut from the Bank of Japan fuelled
anticipation of more monetary easing from the Fed.
[ID:nTOE69305D]
                                
 "The BoJ announcement yesterday to keep rates low signalled
more QE (quantitative easing) in the market, and investors are
losing interest in currencies and buying gold," said a
Singapore-based trader, expecting the next resistance level for
gold at $1,350. "For now gold is the asset of choice."
                                
 
                                
 CURRENCY MATTERS
                                
 One key element to gold's recent display of strength is that
it has only really materialised in dollar-denominated terms. The
gold price in euros <XAUEUR=R>, Japanese yen <XAUJPY=R>,
sterling <XAUGBP=> and Swiss francs <XAUCHF=R> has risen in the
last week, but far underperforming the 2.1-percent rise in
dollar-priced gold.
                                
 Traders in Asia said they expected to see profit-taking
after China's markets reopen on Friday after a week-long
National Day holiday, at prices above the $1,340 level. But
pull-backs would be brief thanks to growing interest in gold.
                                
 On the physical market, there was light scrap selling from
Thailand and short-covering from speculators, a Singapore-based
dealer said.
                                
 Spot silver <XAG=> rose to a fresh 30-year high of $23.06 an
ounce, before easing to $22.92 still showing a gain on the day
after Tuesday's notional close at $22.78.
                                
 Investor interest in silver continued to rise. Holdings in
the iShares Silver Trust <SLV>, the world's largest
silver-backed exchange-traded fund, rose 94.32 tonnes to a new
all-time high of 9,877.20 tonnes by Oct 5.
                                
 Platinum group metals rose along with gold. 
                                
 Palladium <XPD=> rallied to its highest since July 2001,
having hit a session peak at $591.50 an ounce, before paring
some gains to trade at $589.00, up from $574.60 the day before.
                                
 Constrained supply and roaring demand from auto markets in
the emerging world, and in particular, China, have pushed the
price of palladium up by over 45 percent this year.
                                
 "It's a mixture of optimism about developing markets, also a
feeling that a double-dip recession has been avoided maybe,"
said Mitsubishi's Turner. "I think perhaps also you're seeing
this belief that if you get currency wars and QE, then real
assets are the way forward, so it's a dollar move as well."
                                
 Platinum <XPT=> hit $1,705.50 an ounce, highest since
mid-May, before easing to $1,698.00, from $1,693.75.
                                
 (Additional reporting by Lewa Pardomuan, Rujun Shen and
Alejandro Barbojosa in SINGAPORE; editing by Sue Thoma)