* Premiums for gold bars in Tokyo rise
* Gold supported by inflation worries
* Coming up: U.S. Feb producer prices at 1230 GMT
(Recasts, adds comment/detail, pvs Singapore)
By Pratima Desai
LONDON, March 17 (Reuters) - Gold rose on Thursday,
sustained by a rise in ETF holdings, stronger physical demand
and a weaker dollar, but investor selling to cover losses in
other markets limited gains.
Platinum and palladium fell as the market fretted about a
loss of demand due to car plant closures in Japan after the
earthquake.
Platinum and palladium tumbled to 3-1/2 month lows of $1,654
and $684.50 an ounce.
U.S. gold futures for April <GCJ1> was up $5.4 an ounce to
$1,401.50 an ounce. Spot gold <XAU=> was bid at $1,401.05 a troy
ounce at 1054 GMT from $1,399.30 late in New York on Wednesday.
Earlier this week gold fell to a one-month low of $1,380.90.
"With gold dropping below $1,400 we continue to see good
demand in the physical market. At levels above $1,430 we see
scrap coming to the market," said Walter de Wet, analyst at
Standard Bank. "There's been consistent liquidation ... since
last week, following the earthquake."
Stock markets around the world show signs of recovery, but
many investors are nursing large losses because of the sell-off
triggered by the earthquake and tsunami which hit Japan last
week. [] [] [] []
These losses in some cases have to be covered by selling
assets such as gold which have performed well in recent months.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings edged up to 1,217.295 tonnes
by March 16 from 1,212.745 tonnes by March 15, their lowest
since May of last year. []
Premiums for gold bars rose to as much as $2 an ounce in
Tokyo, double from earlier this week, as a record-high yen
boosted demand and supply tightened. []
SHORTAGES OF PARTS AND WORKERS
The dollar <.DXY> fell broadly against major currencies and
was near a record low against against the yen <JPY=>, which was
boosted by expectations of currency repatriation to help Japan's
reconstruction effort. []
A lower dollar makes commodities priced in dollars cheaper
for holders of other currencies, while gold is also used as a
hedge against inflation pressures often sparked by rising crude
oil prices. []
"Concerns remain that rising commodity prices could feed
into higher inflation, particularly in Europe (where) headline
inflation is already a concern," ANZ said in a note. "Gold is
expected to benefit in a higher inflation environment."
Spot silver <XAG=> was at $34.38 an ounce from $34.20 late
on Wednesday. Platinum <XPT=> was at $1,694.24 an ounce from
$1,686.50 and palladium <XPD=> at $706.72 from $694.50.
Part of the reason for the recovery was news on Wednesday
that car marker Nissan Motor <7201.T> said it would restart
operations at a plant in Japan. []
But many other plants are still shut and may remain so for
some time as Japanese auto makers, led by Toyota Motor Co
<7203.T>, are struggling to restart production amid a shortage
of parts and workers. []
"There was relief after the Nissan news, but it doesn't look
as though (Japanese carmakers) are going to be back at full
capacity any time soon, not good news for PGMs," a trader said.
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Japan's demand for platinum group metals []
Price graphic http://link.reuters.com/pys58r
Japan earthquake and commodities:
http://link.reuters.com/kuw58r
Japan disaster in figures http://r.reuters.com/ser58r
Graphics by topic http://r.reuters.com/fyh58r
Picture, graphic packages http://r.reuters.com/wyb58r
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(Reporting by Pratima Desai; editing by Jason Neely)
