* Gold hits record high $1,313.20.
* Dollar ails on expectations of further quantitative easing
* Main gold, silver ETF assets up; iShares Silver at record
* Record gold prices lift silver, platinum, palladium
(Updates throughout with comment, refreshes prices)
By Amanda Cooper
LONDON, Sept 29 (Reuters) - Gold hit its 10th record high in
12 trading days on Wednesday as investors worried that
aggressive measures by the Federal Reserve to prop up the U.S.
economy could undermine the dollar and spark inflation.
Spot gold <XAU=> hit a record $1,313.20 and was bid at
$1,308.65 an ounce at 1443 GMT, against $1,307.40 late in New
York on Tuesday. U.S. gold futures for December delivery <GCZ0>
rose $1.70 an ounce to $1,310.10.
Gold's strength also lifted other precious metals, with
silver reaching a fresh 30-year peak, palladium its highest
level since March 2008 and platinum a four-month high.
The price of gold has rallied by 5 percent in September, on
track for a second month of increases, and while analysts are
expecting to see some sort of pull-back, further gains appear to
be on the cards.
"Essentially, it feels like we need to consolidate a bit.
However, there are a lot of people thinking that, but very few
are willing to short the market," said Credit Suisse analyst Tom
Kendall.
"It's quite possible that if there are any further upsets in
either the currency markets or the rates markets ... we could
get another leg higher and then we'd be looking at the next
upside target at $1,330," he said.
The dollar fell for a fourth consecutive session to hit a
new five-month low against the euro as broadly weak economic
data reinforced the belief the Fed could resume its purchases of
Treasuries to keep interest rates low. []
"Gold is flying because of concerns over a weakening dollar,
and the prospect of quantitative easing," said David Wilson, an
analyst at Societe Generale. "Our internal house view is for a
slight softening of the dollar over the next 3-6 months."
"We are not convinced the European economy is going to be
doing particularly well next year either," he added. "It is
going to be a kind of competition (to show) who will be worse
out of the two."
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For a graphic showing the relationship between quantitative
easing expectations, the dollar, and gold, click on:
http://graphics.thomsonreuters.com/F/09/GLD_IRDLR0910.gif
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INVESTMENT STRONG
Buying in India, the world's biggest gold consumer, rose on
Wednesday despite the hike in spot prices, as strength in the
rupee helped shield local buyers from the rise. []
Scrap sales have also slowed after prices retreated from
their rupee peak, with sellers waiting for prices to breach the
20,000-rupee level from around 19,100 rupees currently.
Investment interest in gold was also firm, with holdings of
the world's largest gold-backed exchange-traded fund, New York's
SPDR Gold Trust <GLD>, climbing just over five tonnes on
Tuesday. []
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For a graphic showing gold's price performance adjusted for
inflation, click on: http://r.reuters.com/nym54p
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Holdings of the largest silver ETF, the iShares Silver Trust
<SLV>, also rose on Tuesday, climbing 143 tonnes to a record
high of 9,756 tonnes. []
Silver prices <XAG=> responded my marking another 30-year
high at $22.00 an ounce, before easing back to $21.81 an ounce
against $21.69. Gains in silver are outstripping those of gold.
"The ratio of gold to silver dropped below 60 for the first
time in 11 months," said Fairfax analyst John Meyer.
"Silver has outperformed gold since the end of June, gaining
17 percent compared with gold's 5.4 percent climb, as investors
bought on the back of the metals relative cheapness."
Palladium <XPD=> was the biggest climber of the precious
metals on Wednesday, rising by as much as 2.5 percent to a 2-1/2
year high at $571 an ounce earlier in the day, before slipping
back to $566.00 versus $557.15. The autocatalyst metal is rising
on hopes demand will improve.
Platinum <XPT=> reached its highest since May at $1,650.50,
and was later at $1,647.00 an ounce against $1,631.65.
(Additional reporting by Jan Harvey; editing by Sue Thomas)
