PRECIOUS-Gold futures hit record above $1,500/oz; dlr falls

                                
 * U.S. gold futures briefly rise above $1,500/oz
                                
 * Euro zone debt, U.S. deficit fears keep markets on edge
                                
 * Gold/silver ratio drops to lowest since 1983
                                
 * Coming up: U.S. existing home sales on Wednesday
 (Recasts, adds comment, links to graphic, updates prices)
                                
 By Frank Tang
                                
 NEW YORK, April 19 (Reuters) - Gold futures hit an all-time
high above $1,500 an ounce on Tuesday and silver surged on a
combination of dollar decline, crude oil gains and worries
about sovereign debt problems in Europe.
                                
 After being initially pressured by technical selling,
bullion rose to a record for a second straight day on market
jitters after Standard & Poor's on Monday revised the credit
outlook of the United States to negative from stable.
                                
 The CBOE gold volatility index <.GVZ>, a gauge of bullion
investor anxiety, fell 4 percent after surging to its highest
level in four months on Monday. U.S. gold futures activity was
quieter than usual as global stock markets steadied following
the previous session's equity sell-off.
                                
 "It's follow-through buying from yesterday after the market
had absorbed an initial bout of profit-taking. The recovery of
oil prices and the euro have combined to take gold to the
$1,500 level," said James Steel, chief commodity analyst of
HSBC.
                                
 U.S. gold futures for June delivery <GCM1> settled up $2.20
at $1,495.10 by 2:00 p.m. EDT (1800 GMT), having earlier hit a
record $1,500.50 an ounce.
                                
 Spot gold <XAU=> gained 0.1 percent to $1,496.69 an ounce,
bouncing off a high of $1,499.31. Bullion was set for its fifth
consecutive higher session.
                                
 Risky assets were hit by a double-whammy on Monday after
fears mounted that Greece will have to restructure its debt,
maybe as early as this summer, and S&P threatened to cut the
United States' AAA credit rating.
                                
 Silver <XAG=> also set a 31-year high of $43.92 an ounce,
and was later up 1.3 percent at $43.90.
                                
 Silver has outperformed gold this year, up more than 40
percent so far against gold's 5 percent rise. The gold/silver
ratio slipped to a 28-year low below 35 on Monday.
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 Graphic showing gold:silver ratio:
                                
    http://r.reuters.com/jyx88r
                                
 Graphic showing gold prices in inflation-adjusted terms:
                                
    http://r.reuters.com/ren88r
                                
 Graphic showing commodity performance:
                                
    http://r.reuters.com/duj88r
                                
 Graphic showing inflation-adjusted record high:
                                
    http://r.reuters.com/ren88r
                                
 Graphic showing gold priced in euros:
                                
 http://link.reuters.com/xux98r
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 CRUDE OIL GAINS, DOLLAR DROPS
                                
 Rising crude prices also lifted gold, which is often seen
as a hedge against oil-led inflation. Signs that inflation is
becoming a major issue in emerging markets, particularly China,
has been identified as another support to the precious metal.
                                
 Gold remained far below its all-time inflation-adjusted
high, estimated at almost $2,500 an ounce, set in 1980, an era
of Cold War tension, oil shocks and hyperinflation.
                                
 "Most of the trends out there -- worries about the euro,
worries about coming inflation, worries about U.S. debt,
Chinese buying seeming relatively strong -- suggest the price
ought to be going higher," said David Jollie, an analyst at
Mitsui Precious Metals.
                                
 Bullion also benefited from a stronger euro against the
dollar after the euro zone composite PMI private-sector
economic indicator nudged up. [FRX/]
                                
 Dennis Gartman, publisher of the Gartman Letter, said
euro-priced gold's <XAUEUR=R> rally toward 1,050 euros, a
four-month high, was an important technical indicator. Gartman
added he will buy gold in euro terms on any correction toward
1,025 euros.
                                
 Among other precious metals, platinum <XPT=> slipped 0.4
percent to $1,766 an ounce, while palladium <XPD=> dropped 1.2
percent to $730.72.
Prices at 2:00 p.m. EDT (1800 GMT)    
                                
                          LAST/      NET    PCT     YTD
                                
                          CLOSE      CHG    CHG     CHG
US gold         <GCM1>     1495.10     2.20   0.1%    5.2%
US silver       <SIK1>      43.913    0.957   0.0%   41.9%
US platinum     <PLN1>     1771.30   -11.50  -0.6%   -0.4%
US palladium    <PAM1>      731.10    -8.00  -1.1%   -9.0%
Gold            <XAU=>     1496.69     1.61   0.1%    5.4%
Silver          <XAG=>       43.90     0.58   1.3%   42.3%
Platinum        <XPT=>     1766.00    -6.65  -0.4%   -0.1%
Palladium       <XPD=>      730.72    -9.21  -1.2%   -8.6%
Gold Fix        <XAUFIX=>  1490.50    -4.50  -0.3%    5.7%
Silver Fix      <XAGFIX=>    43.22    43.00   1.0%   41.1%
Platinum Fix    <XPTFIX=>  1780.00     2.00   0.1%    2.8%
Palladium Fix   <XPDFIX=>   737.00     1.00   0.1%   -6.8%
 (Additional reporting by Jan Harvey in London; Editing by Lisa
Shumaker and Sofina Mirza-Reid)