* Unrest in Yemen, Oman, Libya fuels safe-haven buying
* Middle East, N. Africa tensions support oil, hit dollar
* Silver prices set for 20 pct rise in February
* Coming up: Fed's Bernanke Congress testimony Tue, Wed.
(Recasts, updates prices, market activity; changes byline,
dateline, previously LONDON)
By Frank Tang
NEW YORK, Feb 28 (Reuters) - Gold was little changed near
$1,410 an ounce on Monday but notched its biggest monthly gain
since August as chaos in Libya and rising tensions across the
Middle East prompted investors to buy the metal as a safe
haven.
Despite its February gains, gold failed to test its record
high set in December due to technical resistance, as financial
markets had already factored in the geopolitical risk premium
for gold, analysts said.
Unrest across the Middle East and North Africa, which
unseated leaders in Tunisia and Egypt before spreading across
Libya, Bahrain, Yemen and other countries, fueled a 5.5 percent
rise in gold prices this month.
"It requires some spreading of the political turmoil and an
intensification in those other countries to see gold make much
bigger gains," said Mitsubishi analyst Matthew Turner.
Turner said it will be difficult for gold to rise further
after breaching $1,400 an ounce. Bullion set an all-time high
of $1,430.95 an ounce on Dec. 7.
Spot gold <XAU=> eased 0.2 percent to $1,406 an ounce at
2:40 p.m. EST (1940 GMT). U.S. gold futures for April delivery
<GCJ1> settled up 60 cents at $1,409.90.
Foreign powers accelerated efforts to help oust Libyan
leader Muammar Gaddafi on Monday as rebels fought government
forces trying to take back strategic coastal cities on either
side of the capital Tripoli. []
Last week, gold posted its fourth consecutive weekly gain
as the crisis in Libya and soaring oil prices stoked inflation
worries.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Take a look on Middle East unrest: []
Graphic: Middle East unrest http://r.reuters.com/nym77r
Interactive factbox: http://link.reuters.com/puk87r
Reuters Insider: Gold May Reclaim $1,431 on Unrest:
http://bit.ly/eFPi5w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Silver <XAG=> gained 0.6 percent to $33.51 an ounce after
rising for a fifth consecutive week last week. Prices have
rallied 20 percent this month, their biggest one-month rise
since May 2009.
The gold-silver ratio, which shows how many ounces of
silver it takes to buy one ounce of gold, approached a 13-year
low. Silver has risen amid limited supplies for near-term
delivery and on prospects of rising demand for industrial
metals as the economy recovers.
Hallgarten & Co, an investment research firm, said in a
note that gold should benefit more as a safe haven than silver
as investors focus on resurgent inflation and growing world
tensions.
On charts, gold is still tracing out a large base to
consolidate its recent move, and the metal is expected to hold
in a range until it breaks above resistance near $1,425 an
ounce, said Adam Sarhan, chief executive of Sarhan Capital.
DOLLAR DROP LIFTS GOLD
Gold was also supported by the U.S. dollar which fell to a
3-1/2 month low against major currencies and may extend losses
on speculation Federal Reserve Chairman Ben Bernanke will
continue to support stimulative policy when he testifies before
the Senate Banking Committee on Tuesday. []
A mixed bag of economic data failed to give bullion a clear
direction.
U.S. consumer spending rose modestly in January, getting
the year off to a soft start. Other data painted a bullish
picture of the manufacturing sector with a gauge of factory
activity in the country's Midwest hitting a 22-1/2 year high
this month, which should help the economy weather rising oil
prices.
Markets are still wary about inflation as oil prices
remained elevated after hitting 2-1/2 year highs last week on
the back of tensions across the Arab world. []
UBS said in a note that higher oil prices are a
double-edged sword for gold. While high oil prices could
stimulate more safe-haven demand, gold could be vulnerable if
central banks raise interest rates to battle inflation, it
said.
Among other precious metals, platinum <XPT=> edged down 50
cents to $1,802.99 an ounce and palladium <XPD=> gained 1.1
percent to $794.22.
Prices at 2:41 p.m. EST (1941 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1409.90 0.60 0.0% -0.8%
US silver <SIK1> 33.820 0.897 0.0% 9.3%
US platinum <PLJ1> 1809.20 5.80 0.3% 1.7%
US palladium <PAM1> 799.60 12.00 1.5% -0.5%
Gold <XAU=> 1405.70 -3.45 -0.2% -1.0%
Silver <XAG=> 33.44 0.13 0.4% 8.4%
Platinum <XPT=> 1803.24 -0.26 0.0% 2.0%
Palladium <XPD=> 794.22 8.82 1.1% -0.7%
Gold Fix <XAUFIX=> 1411.00 1.25 0.1% 0.1%
Silver Fix <XAGFIX=> 33.49 95.00 2.9% 9.3%
Platinum Fix <XPTFIX=> 1804.00 3.00 0.2% 4.2%
Palladium Fix <XPDFIX=> 790.00 0.00 0.0% -0.1%
(Additional reporting by Jan Harvey in London; editing by Jim
Marshall)
