Gold jumps to new record highs over $1480 US dollar per ounce on Friday as Asian demand is unstoppable.

Silver is holding near its earlier 31-year high at $42.64. Spot gold was at $1,480.10 an ounce at 1417 GMT, versus $1,472.90 late on Thursday, having hit a record $1,479.01 in Asian trading. Silver was at $42.62 an ounce against $42.08.

The euro fell after Moody's cut Ireland's sovereign rating and left the outlook negative. Consequent gains in the dollar, which make assets priced in the unit more expensive for other currency holders, curbed gold's rise.

While the initial impact of the move on currencies has taken some of the wind out of gold's sails, euro zone debt fears are likely to support prices in the long run.

The market has been reacting to (the credit issues in peripheral Europe) by looking for ways to protect themselves from these types of risks, and gold is seen as a way to do that, said Deutsche Bank analyst Daniel Brebner.

He said the main impact on gold of elevated debt levels in Portugal, Greece, Ireland and Spain came from the ways in which euro zone authorities addressed the issue.

Do we see a bailout, do we see more money being extended into these countries, do we see monetary accommodation remaining very much the bias in Europe? he said. If that's the case, that should be very supportive of gold markets.

European shares dipped after the downgrade, while the cost of insuring against a default by Greece and Ireland rose on growing speculation Greece will eventually have to restructure its debt and after the Moody's downgrade. .EU

DEVELOPING WORLD INFLATION RISES

China and India reported higher-than-expected inflation readings on Friday, giving fresh ammunition to central bankers and investors alike who are worried about mounting price pressures in the global economy.

Gold, which is often seen as a hedge against inflation, would likely benefit if inflation pressures rise significantly.

Among other commodities, oil prices eased as the dollar firmed, although they remain near multi-year highs as fighting in Libya continues, supporting fears output could be hit. Stronger oil prices also tend to benefit gold prices.

Goldman Sachs recommended investors go underweight commodities over a three to six month horizon, echoing its call from Monday, saying oil prices are higher than justified by current supply and demand.

But gold prices look set to remain firmly underpinned.

The bullion market has found support one day from economic uncertainty and changes in risk sentiment, and on another day by high oil and food prices, and on yet another by sovereign risk and fiscal concerns, said HSBC analyst Jim Steel in a note.

Elsewhere, shares in some North American silver miners fell sharply overnight after Bolivia's leftist government said it might rescind concessions on four mines in the country run by Glencore International Ltd GLEN.UL affiliates and Canada's Pan American Silver Corp (PAA.TO)(PAAS.O).

Bolivia was the world's sixth-largest primary silver producer last year, metals consultancy GFMS said in a report, with output of 41 tonnes.

Among other precious metals, platinum was at $1,789.49 an ounce against $1,786.49, while palladium was at $769.28 against $760.63.