* Silver rises to highest level since early 2008
* Gold holds flat as equity markets rally
* Chinese factory data, banking rules boost equities
* Coming up: GFMS Gold Survey Update due Tuesday
(Recasts, updates prices, market activity to close, changes
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, Sept 13 (Reuters) - Gold ended flat on Monday
while silver rose to its highest level since early 2008, as
upbeat Chinese factory data and new global banking rules
boosted optimism about the economy.
Wall Street rose on the economic news, which boosted
silver, a precious metal that also has industrial uses. But
investment demand kept gold within about 1.5 percent of an
all-time high.
Since Aug. 24, silver has rallied about 14 percent,
outperforming gold's 3 percent rise over the same period,
Reuters data showed.
The gold-to-silver ratio fell to just above 60, the lowest
level since January. (Chart: http://link.reuters.com/wak33p)
Miguel Perez-Santalla, vice president of sales at Heraeus
Precious Metals Management in New York, said that while scrap
supply of gold was rising, prices remained underpinned by
safe-haven buying and investment demand amid economic
uncertainties. But he expected silver to keep outperforming
gold.
"Fundamentally, silver is very actively consumed in all
sort of businesses and industries. I still think silver has
more potential than gold," he said.
Silver is widely used in the electronics sector because of
its excellent conductivity. The metal is also used in the
photography, medical and the jewelry industries.
Spot silver <XAG=> was last at $20.08 an ounce, the highest
since March, 2008 and up from $19.84 on Friday.
Spot gold <XAU=> was at $1,244.30 an ounce by 2:55 p.m.
(1855 GMT), down slightly from $1,245 in New York on Friday.
Gold remains within around 1.5 percent of the all-time highs
set in late June at $1,264.90.
Last week, gold posted its first decline in more than a
month. Gold hit a two-month high above $1,262 an ounce last
week on renewed global economic concerns before losing some
gains to profit-taking and better-than-expected U.S. data on
jobless benefits.
U.S. December gold futures <GCZ0> settled up 60 cents at
$1,247.10 an ounce.
The gold market largely ignored an agreement among global
regulators on bank capital rules, known as Basel III, which
requires the sector to raise hundreds of billions of euros.
[]
"It seems risk is a bit back on the table, with China
looking okay and Basel swinging the whip, but so far ahead that
it's going to take quite a few years for the banks to implement
(the rules)," Ole Hansen, senior manager at Saxo Bank, said.
The new rules will take effect over a longer timeframe than
originally expected, and that boosted the global stock market
and took some steam out of gold's safe-haven appeal, traders
said.
Wall Street trimmed initial gains but still rose nearly 1
percent. []
Adding to the pressure on gold was a broad-based decline in
the dollar, which fell 1 percent against the euro <EUR=> as
investors took on more risk. []
Gold usually benefits from weakness in the dollar, which
makes bullion cheaper to non-U.S. buyers, but the inverse
relationship between the two has eroded somewhat in recent
weeks as risk appetite has dominated flows into both assets.
UPBEAT DEMAND OUTLOOK
Although consumer demand in Asia was muted on Monday, this
time of year marks a period of intense offtake in India, the
world's largest consumer, while the outlook for demand in
Europe this year looks fairly bright.
Helping improve risk appetite was a pickup in Chinese
industrial production and money growth in August that reflected
buoyant economic growth despite government efforts to clamp
down on bank lending and property speculation. []
The platinum group metals rose along with other industrial
commodities led by crude oil. <CLc1>
Platinum <XPT=> was at $1,546.50 an ounce, against
$1,536.98 and palladium <XPD=> was at $529, from $514.63.
Prices at 3:06 p.m. EDT (1906 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1247.10 0.60 0.0% 13.8%
US silver <SIZ0> 20.110 0.308 0.0% 19.4%
US platinum <PLV0> 1549.90 7.40 0.5% 5.4%
US palladium <PAZ0> 527.80 10.25 2.0% 29.1%
Gold <XAU=> 1244.85 -0.15 0.0% 13.5%
Silver <XAG=> 20.08 0.24 1.2% 19.2%
Platinum <XPT=> 1546.50 9.52 0.6% 5.5%
Palladium <XPD=> 529.00 14.37 2.8% 30.5%
Gold Fix <XAUFIX=> 1243.75 0.75 0.1% 12.7%
Silver Fix <XAGFIX=> 19.93 3.00 0.2% 17.3%
Platinum Fix <XPTFIX=> 1545.00 3.00 0.2% 5.4%
Palladium Fix <XPDFIX=> 522.00 0.00 0.0% 29.9%
(Additional reporting by Amanda Cooper and Maytaal Angel in
London; Editing by David Gregorio)
