* Gold underpinned by raging violence in Libya
* PIMCO fund dumps US debt, buoying bullion sentiment
* Renewed EU debt worries ahead of summit benefit bullion
* Coming up: U.S. initial jobless claims Thursday
(Adds graphic, updates prices)
By Frank Tang
NEW YORK, March 9 (Reuters) - Gold pared gains after rising
toward its record high on Wednesday, as a pullback in crude oil
prices offset safe-haven buying inspired by mounting unrest
across the Arab world and renewed euro zone debt worries.
Gold largely tracked movements in oil, which rose earlier
in the session as pro-democracy protests spread from Libya to
Yemen and Kuwait, prompting worries that outweighed OPEC
assurances of ample spare capacity.
U.S. crude oil later ended lower.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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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"Crude oil is really trading as the barometer of fear right
now, and the lack of follow through in the upside of crude is
taking some of the flight-of-quality aspect out of the gold
market right now," said Adam Klopfenstein, senior market
strategist of MF Global's Lind-Waldock.
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=> gained 0.2 percent to $1,429.60 an ounce
by 3:15 p.m. EST (2015 GMT). U.S. gold futures for April
delivery <GCJ1> rose $2.40 an ounce to settle at $1,429.60.
Sentiment among bullion investors improved on news that
PIMCO's Total Return Fund <PTTRX.O>, the world's biggest bond
fund, has dumped all U.S. government-related securities,
including U.S. Treasuries and agency debt, sources told
Reuters. [] The move boosted gold's status as a
hedge against U.S. dollar depreciation and inflation.
The metal also 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.
Dennis Gartman, author of the Gartman letter, a daily
investment newsletter, said that technical charts of
euro-priced gold resembled a bullish "flag" formation,
indicating prices could rise further.
(Graphic: http://link.reuters.com/vav48r)
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. []
"The market is really eager to find out how this whole debt
crisis in Europe is settled," said Credit Agricole analyst
Robin Bhar. "It's been lingering on for a long, long time."
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 set Monday,
largely on safe-haven buying linked to unrest in the Middle
East region.
LIBYA UNREST
Violence continued in Libya, underpinning gold,
[] which has risen nearly 10 percent in seven
weeks. Over that period, protests in Tunisia and Egypt spread
to other parts of the Middle East and North Africa, triggering
a 20-percent rise in crude oil, which increased bullion's
appeal as an inflation hedge.
Some of the world's largest exchange-traded funds have
boosted gold holdings more than 340,000 ounces so far this week
to over 61 million ounces.
Silver <XAG=> rose for a fourth consecutive session, rising
0.1 percent to $36.03 an ounce on tightness in near-term
supplies and continued inflows into ETFs. []
Platinum <XPT=> eased 0.2 percent at $1,799.24 an ounce,
while palladium <XPD=> lost 1.5 percent to $777.72.
Prices at 3:15 p.m. EST (2015 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1429.60 2.40 0.2% 0.6%
US silver <SIK1> 36.047 0.389 0.0% 16.5%
US platinum <PLJ1> 1802.00 -0.60 0.0% 1.3%
US palladium <PAM1> 781.65 -5.05 -0.6% -2.7%
Gold <XAU=> 1428.64 0.45 0.0% 0.6%
Silver <XAG=> 36.03 0.03 0.1% 16.8%
Platinum <XPT=> 1799.24 -3.50 -0.2% 1.8%
Palladium <XPD=> 777.72 -11.50 -1.5% -2.7%
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 Amanda Cooper and Jan Harvey in
London; Editing by David Gregorio and Sofina Mirza-Reid)
