* Scrap selling slows after gold hit record high; price
outlook bullish
* Gold to rise towards $1,450 - technicals
* Coming up: U.S. Fed Beige book; 1900 GMT
(Adds graphic, comment; updates prices)
By Rujun Shen
SINGAPORE, March 2 (Reuters) - Spot silver hit a 31-year
high, while gold traded less than half a percent from a record
high struck this week, as tensions in the Middle East
underpinned safe-haven demand and surging oil prices helped.
With Libya on the edge of a civil war, protesters took to
the street in Yemen, Iran and Oman and clashed with government
forces. For the latest stories on the unrest in Libya, Middle
East and North Africa, click
Fears of spreading unrest in the region sent oil surging
back towards last week's 2-1/2 year highs.
"If the contagion gets a little bit out of hand in Saudi
Arabia or Iran, the results are not positive for equities and
not positive for inflation. It's an event that everyone is
trying to avoid," Jonathan Barratt, managing director of
Commodity Broking Services.
Spot silver struck $34.74 an ounce, its highest since
early 1980. It was trading at $34.46 at 0637 GMT.
U.S. silver futures rose to $34.74, and weakened a
bit to $34.49.
Spot gold hit an intra-day high of $1,434.45, just 20
cents below the record hit in the previous session. It had since
eased to $1,428.94.
Key support level is seen at $1,420 to $1,425, while charts
suggest a rally towards $1,450 may be on the cards in the near
term, according to Reuters analyst Wang Tao.
"We may be another new high in the very near future, because
the recent events have triggered another round of buying
interest and the situation in the Middle East and North Africa
is unlikely to stabilise very soon," said a Hong Kong-based
trader.
The positive view on bullion was shared by the scrap market
where sales have slowed, anticipating higher prices.
The gold-silver ration, used to measure how many ounces of
silver is needed to buy an ounce of gold, fell to a 13-year low
of 41.33 earlier in the day.
Due to silver's double identity as an industrial and
precious metal, it could benefit from safe haven interest
spilling out from gold but also take a hit if economic prospects
are dampened.
"The same rational we apply to gold going up could stop
silver from going higher," said Barratt.
"We should start seeing the gold-silver ratio move in favour
of gold."
The fear that rising oil prices could hurt the global
economic growth has driven up safe-haven demand for gold, but
the U.S. Federal Reserve Chairman Ben Bernanke said a surge in
oil prices is unlikely to hurt the U.S. economy unless it is
sustained.
The euro fell slightly on Wednesday after yet again failing
to break through a key resistance level, helping lift the dollar
off a 3-1/2 month low against a basket of currencies.
Precious metals prices 0637 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1428.94 -4.76 -0.33 0.67
Spot Silver 34.46 -0.20 -0.58 11.67
Spot Platinum 1832.00 -6.49 -0.35 3.65
Spot Palladium 808.38 -6.09 -0.75 1.11
TOCOM Gold 3775.00 27.00 +0.72 1.23 67977
TOCOM Platinum 4892.00 52.00 +1.07 4.17 21710
TOCOM Silver 90.60 1.10 +1.23 11.85 2058
TOCOM Palladium 2150.00 33.00 +1.56 2.53 601
COMEX GOLD APR1 1429.50 -1.70 -0.12 0.57 11806
COMEX SILVER MAY1 34.49 0.06 +0.17 11.46 2778
Euro/Dollar 1.3753
Dollar/Yen 81.90
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Ed Lane)
