* Gold heads for smallest quarterly gain since Q3 2008
* Dollar weakness, oil rally boost bullion
* Gold underpinned by euro zone debt worries
* Coming up: U.S. March nonfarm payrolls report Friday
(Rewrites, updates with comment, market activity, adds NEW
YORK dateline/byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 31 (Reuters) - Gold prices rose
nearly 1 percent on Thursday, set for a 10th straight quarterly
gain, as the dollar fell against the euro and as oil rallied on
Middle East supply worries.
Ultra-loose monetary policies by central banks, euro zone
debt fears and political unrest across the Middle East have
been major drivers for gold, although the metal is on track to
end the first quarter with its smallest gain since the third
quarter of 2008, before the financial crisis took hold.
"Gold just managed by a whisker to produce another positive
quarter, the 10th in a row. Overall, the performance was not
impressive amid the multitude of uncertainties that the world
had to deal with during the first three months of 2011," said
Ole Hansen, senior manager at Saxo Bank.
Spot gold <XAU=> rose 0.9 percent to $1,436.69 an ounce by
12:28 p.m. EDT (1628 GMT). U.S. gold futures for June delivery
<GCM1> rose 0.9 percent to $1,438.20.
NONFARM PAYROLL EYED
The metal was set to notch its biggest one-day gain in
nearly two weeks, a day before Friday's U.S. non-farm payrolls
for March, considered a key indicator of the health of the U.S.
economy. []
Investors bought gold to hedge against uncertainty related
to Friday's job report, and as oil rallied as Middle East
protests and unrest and Libya's conflict kept threats to crude
supply in focus, analysts said.
Silver <XAG=> gained 0.6 percent to $37.67 an ounce. Silver
is on track for a ninth consecutive quarterly gain, with a 22
percent increase in the first three months of the year, as
investors bet on further gains in gold and expectations that
industrial demand will improve.
Earlier in Thursday's session, the gold/silver ratio
dropped below 38, its lowest level since 1983.
(Graphic: http://link.reuters.com/dyw78r)
EURO ZONE DEBT JITTERS
Gold was also supported as the euro outperformed the dollar
on inflation data that firmed expectations the European Central
Bank would raise interest rates, but the unit's strength may
prove temporary, with peripheral debt issues seen persisting in
the second quarter.
Concerns over euro zone sovereign debt were a major factor
in last year's 30 percent rise in the price of gold.
On Thursday, rating agency Moody's warned further sovereign
ratings downgrades for euro zone countries could not be ruled
out, which fed ongoing investor concern about the region's
finances. []
Platinum <XPT=> rose 0.4 percent to $1,772.74 an ounce,
while palladium <XPD=> gained 1.5 percent to $763.22.
Prices at 12:28 p.m. EDT (1628 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCM1> 1438.20 13.30 0.9% 1.2%
US silver <SIK1> 37.720 0.209 0.6% 21.9%
US platinum <PLN1> 1779.90 5.80 0.3% 0.1%
US palladium <PAM1> 766.00 7.90 1.0% -4.6%
Gold <XAU=> 1436.69 13.31 0.9% 1.2%
Silver <XAG=> 37.67 0.23 0.6% 22.1%
Platinum <XPT=> 1772.74 6.89 0.4% 0.3%
Palladium <XPD=> 763.22 11.44 1.5% -4.5%
Gold Fix <XAUFIX=> 1439.00 8.00 0.6% 2.0%
Silver Fix <XAGFIX=> 37.87 34.00 0.9% 23.6%
Platinum Fix <XPTFIX=> 1773.00 2.00 0.1% 2.4%
Palladium Fix <XPDFIX=> 766.00 5.00 0.7% -3.2%
(Additional reporting by Amanda Cooper in London; Editing by
Walter Bagley)
