* Gold rallies above $1,470/oz, silver breaks above $40/oz
* Inflation worries prompts fund to buy precious, commods
* US gov't shutdown worry, rate differentials hit dollar
* Coming up: Friday midnight deadline looms for US gov't
(Recasts, updates prices, market activity, adds comments)
By Frank Tang
NEW YORK, April 8 (Reuters) - Gold rose to a record high
for a fourth straight day and silver surged on Friday, as a
weaker dollar, the prospect of a U.S. government shutdown and
inflation worries lifted precious metals in a broad commodities
rally.
Gold notched its biggest weekly gain in four months,
drawing support from renewed euro zone sovereign debt fears
amid Portugal's financial crisis and inflation jitters as crude
oil and corn hit new highs this week.
Bullion broke above key resistance on technical charts and
could target above $1,500 an ounce. The metal has risen more
than 10 percent since late January when political unrest began
to flare in the Middle East and North Africa.
"With the expected future inflation being higher in this
low interest rate environment, investors are more inclined to
have some contributions to commodities as an inflation hedge,"
said Hakan Kaya, commodities portfolio manager at Neuberger
Berman, which manages about $190 billion client assets.
Spot gold <XAU=> rose as high as $1,474.60 an ounce and was
later up 1 percent at $1,471.74 an ounce by 2:53 a.m. EDT (1853
GMT). Bullion gained 2.5 percent this week for a fourth
straight weekly gain. U.S. gold futures for June delivery
<GCM1> settled up 1 percent to $1,474.10.
Gold remained far below its all-time inflation-adjusted
high, estimated at almost $2,500 an ounce set in 1980, an era
of Cold War tension, oil shocks and hyperinflation. (Graphic:
http://r.reuters.com/ren88r )
U.S. futures activity was sharply below average for a
second day, but analysts said low volume was not detrimental to
the metal's bull run.
Gains in other commodities also lifted precious metals, as
crude oil futures soared to their highest since 2008 and the
Reuters/Jefferies CRB <.CRB> index rose 1.2 percent.
Silver <XAG=> rose 2.4 percent to $40.50 an ounce, just off
the session high of $40.73.
The gold-to-silver ratio -- the number of silver ounces
needed to buy an ounce of gold -- fell to a 28-year low toward
35 on Friday. (Graphic: http://r.reuters.com/myt88r)
"One would expect silver to outperform in this environment
because it bears a higher risk than gold on a volatility
basis," Kaya said.
On charts, gold breached important technical resistance at
$1,466 an ounce near Thursday's high, said Rick Bensignor,
chief market analyst at Dahlman Rose.
If bullion could hold above $1,466 early next week, it
should next target an area between $1,500 and $1,510 an ounce,
Bensignor said.
DOLLAR WEAKNESS UNDERPINS
The dollar's 1 percent slide to a 15-month low against the
euro added fuel to a rally that has taken gold to a series of
record highs.
The dollar slid on a stalemate in Washington over U.S.
government funding. []
The looming U.S. government shutdown was "simply a minor
problem of far greater problems," said Camilla Sutton, chief
currency strategist at Scotia Capital. She said she expected
the dollar to remain weak this yea.
Analysts said the dollar could further weaken because of
the widening interest rate differentials after ECB's first
interest rate hike after the 2008 financial crisis on
Thursday.
Federal Reserve policy remained in focus. []
Atlanta Fed President Dennis Lockhart said it was unlikely
recent spikes in commodity costs would lead to runaway
increases in prices, but Dalls Fed president Richard Fisher
said prolonged easy monetary policy could compound what might
otherwise be transitory inflationary pressures.
Gold has been a major beneficiary since the Fed has kept
short-term rates near zero since December 2008.
Among other precious metals, platinum <XPT=> gained 1.3
percent to $1,803.74 an ounce, while palladium <XPD=> jumped
2.2 percent to $791.97.
Prices at 2:52 p.m. EDT (1851 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCM1> 1474.10 14.80 1.0% 3.7%
US silver <SIK1> 40.608 1.056 0.0% 31.3%
US platinum <PLN1> 1812.10 21.50 1.2% 1.9%
US palladium <PAM1> 794.20 13.95 1.8% -1.1%
Gold <XAU=> 1471.74 14.29 1.0% 3.7%
Silver <XAG=> 40.50 0.99 2.4% 31.1%
Platinum <XPT=> 1805.49 24.39 1.4% 2.1%
Palladium <XPD=> 791.72 16.69 2.2% -1.0%
Gold Fix <XAUFIX=> 1469.50 -1.00 -0.1% 4.2%
Silver Fix <XAGFIX=> 40.22 71.00 1.8% 31.3%
Platinum Fix <XPTFIX=> 1803.00 7.00 0.4% 4.2%
Palladium Fix <XPDFIX=> 798.00 9.00 1.1% 0.9%
(Addtional reporting by Julie Haviv in New York, Jan Harvey in
London; Editing by David Gregorio)
