* Quantitative easing seen "not if, but when"
* Dollar up vs euro as single currency hit by Ireland news
* Silver hits 30-yr high; ratio to gold lowest in 11 months
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Sept 30 (Reuters) - Gold held just below the previous
session's record high in Europe on Thursday, on track for a
eighth consecutive quarterly gain, as concerns over the prospect
of further U.S. quantitative easing underpinned prices.
Strength in gold prices also helped lift silver to its
highest level since 1980.
Spot gold <XAU=> was bid at $1,311.65 an ounce at 0838 GMT,
against $1,308.80 late in New York on Wednesday. In that session
it hit a record $1,313.20. U.S. gold futures for December
delivery <GCZ0> rose $2.60 an ounce to $1,312.90.
The precious metals are poised to build on their current
rally ahead of further action from the U.S. authorities to
bolster growth, analysts said.
"With quantitative easing, it is probably no longer a
question of if, but when," said Daniel Briesemann, an analyst at
Commerzbank.
"The other thing in the mind of investors is that there
might be a war (of) currency devaulations in some of the main
world currencies like the dollar, yen, and so on," he said.
"That is supportive for gold as well."
The dollar firmed, rising versus the euro after Ireland's
central bank put the price of bailing out Anglo Irish Bank at 34
billion euros, but stayed near an eight-month low on speculation
of more quantitative easing from the Federal Reserve. []
The U.S. currency is on track for its biggest quarterly drop
since the second quarter of 2002 against a basket of six other
currencies, down 8.4 percent. The euro is up 11.3 percent, also
its best performance since 2002.
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For a graphic showing gold's performance relative to other
commodities, click on: http://r.reuters.com/was95p. For its
performance versus other assets, click on:
http://r.reuters.com/cek95p
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"The apparent resilience of the euro to bad news is
testament to the all-pervasive role of Fed considerations in
driving forex," said Credit Agricole in a note.
"The euro is acting as the flipside to dollar malaise, with
the printing presses looming, (while) the shallow retreats in
EUR/USD underline the appetite to take things higher," it added.
FACTORS
Traditionally dollar weakness has benefited gold as strength
in the U.S. unit lifts gold's appeal as an alternative asset and
makes dollar-priced commodities cheaper for holders of other
currencies. But support for gold has broadened.
"The uncertain macroeconomic backdrop is... key for gold,"
said UBS analyst Edel Tully in a note. "This safe-haven demand
does not have a single cause, but rather is driven by an
interplay between related worries about quantitative easing,
excessive debt, asset diversification, currency debasement
generally and dollar weakness specifically."
On the physical markets, dealers in major Asian gold
consumers reported only light scrap sales despite record highs
prices. "Clients are afraid gold will move higher again," said a
physical dealer in Singapore.
Among other precious metals, silver <XAG=> hit a fresh
30-year high at $22.02 an ounce, and was later at $21.94 an
ounce against $21.87, on track for its biggest monthly gain
since May 2009.
The metal has climbed on the back of rising gold prices, but
continues to outperform its yellow rival. The gold-silver ratio
-- how many ounces of silver are needed to buy an ounce of gold
-- fell to 59.7 on Thursday, its lowest since last October.
"The gold-silver ratio continues to grind lower," said
ScotiaMocatta in a note. "Our target on this move is 58.41, the
2009 low."
Holdings of the world's largest silver-backed
exchange-traded fund, the iShares Silver Trust <SLV>, rose to a
record 9,786.47 tonnes by Wednesday, the trust said, showing
healthy investment appetite for the metal. []
Elsewhere platinum <XPT=> was at $1,649.50 an ounce against
$1,645.75, while palladium <XPD=> was at $565 against $563.45.
(Reporting by Jan Harvey; Editing by Anthony Barker)
