* Gold underpinned by raging violence in Libya
* Renewed EU debt worries ahead of summit benefit bullion
* Coming up: U.S. initial jobless claims Thursday
(Recasts, adds comments, updates prices, adds second
byline/dateline)
By Frank Tang and Amanda Cooper
NEW YORK/LONDON, March 9 (Reuters) - Gold was little
changed on Wednesday as investors booked profits, erasing
earlier gains driven by intensifying political unrest across
North Africa and the Middle East and renewed worries over euro
zone debt.
Gold largely tracked movements in oil, which initially rose
as worries about turmoil in the Arab world, where pro-democracy
protests are spreading from Libya to Yemen and Kuwait,
outweighed OPEC assurances of ample spare capacity. U.S. crude
oil later traded slightly lower.
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Graphic on correlation between gold and oil:
http://link.reuters.com/tet48r
Graphic technical analysis on spot gold:
http://link.reuters.com/zat48r
Factbox on silver ETF: []
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"Gold will be underpinned by the geopolitical risk premium,
by inflationary concerns, and by the debt situation in Europe,"
said Credit Agricole analyst Robin Bhar.
"The market is really eager to find out how this whole debt
crisis in Europe is settled," he said. "It's been lingering on
for a long, long time."
Gold prices are underpinned by weaker global equity markets
as Portugal's cost of borrowing hit a new high ahead of
Friday's euro zone summit to resolve the region's debt crisis.
Analysts, however, said the meeting is unlikely to produce a
breakthrough. []
Spot gold <XAU=> eased 0.1 percent to $1,425.70 an ounce by
11:37 a.m. EST (1637 GMT). U.S. gold futures for April delivery
<GCJ1> lost $1.80 an ounce to $1,425.40.
Despite gold's decline in U.S. dollars, the metal rose
against other major currencies due to lingering worries over
global economic recovery.
Euro-priced gold <XAUEUR=> was set for a fourth daily
rally, its strongest run in two months, while gold priced in
Japanese yen <XAUJPY=R> reached its highest since at least
1983.
The goal for Friday's euro zone summit, to be attended by
17 heads of state, is to agree a competitiveness pact to be
adopted by the bloc members to show their commitment to
overhauling their economies. []
Concern over euro zone sovereign debt was a major factor
driving gold's 30 percent price rise in 2010. It has since
extended gains to a record $1,444.40 an ounce, largely on
safe-haven buying linked to unrest in the Middle East region.
"The market is becoming increasingly despondent about the
likelihood of a comprehensive solution that also provides some
liquidity support for the higher-yielding issuers," said Credit
Agricole in a note.
LIBYA UNREST
Gold's losses are limited as violence continued to flared
in Libya, where rebels were pinned down by tanks and snipers in
the centre of Zawiyah on Monday as forces loyal to Muammar
Gaddafi closed in on their last redoubt in the western Libyan
city. []
Gold has risen by nearly 10 percent in the last seven
weeks, since protests in Tunisia and Egypt spread to other
parts of the Middle East and North Africa, triggering a
20-percent rise in crude oil and that increaed bullion's appeal
as an inflation hedge.
Reflecting investor appetite for gold was another pickup in
holdings of the metal in some of the world's largest
exchange-traded funds, which have risen by over 340,000 ounces
so far this week to over 61 million ounces.
Silver <XAG=> lost 1 percent to $35.64 an ounce, after
initially rising on tightness in near-term supplies and
continued inflows into ETFs. []
Platinum <XPT=> eased 0.5 percent at $1,794.49 an ounce,
while palladium <XPD=> lost 0.9 percent to $782.
Prices at 11:37 a.m. EST (1637 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1425.70 -1.50 -0.1% 0.3%
US silver <SIK1> 35.665 0.007 0.0% 15.3%
US platinum <PLJ1> 1797.00 -5.60 -0.3% 1.1%
US palladium <PAM1> 785.25 -1.45 -0.2% -2.2%
Gold <XAU=> 1425.65 -2.54 -0.2% 0.4%
Silver <XAG=> 35.64 -0.36 -1.0% 15.5%
Platinum <XPT=> 1794.49 -8.25 -0.5% 1.5%
Palladium <XPD=> 782.00 -7.22 -0.9% -2.2%
Gold Fix <XAUFIX=> 1431.00 -0.50 0.0% 1.5%
Silver Fix <XAGFIX=> 36.17 -20.00 -0.5% 18.1%
Platinum Fix <XPTFIX=> 1811.00 2.00 0.1% 4.6%
Palladium Fix <XPDFIX=> 800.00 2.00 0.3% 1.1%
(Additional reporting by Jan Harvey in London; Editing by
Lisa Shumaker)
