* Gold steadies, off intraday high
* Coming Up: EZ Economic sentiment Mar 2011; 0900 GMT (Updates prices)
By Lewa Pardomuan
SINGAPORE, March 30 (Reuters) - Gold steadied on Wednesday on firmer equities and upheaval in Libya, although further gains could be capped by worries that some central banks will have to soon start tightening monetary policy, a move that would dent bullion's appeal as a hedge against inflation.
In recent days, several top U.S. central bank officials have said further bond purchases by the Federal Reserve were not needed to support the economy, while European Central Bank President Jean-Claude Trichet noted his inflation concerns from rising food and energy prices. [ID:nFLATEE7LX]
But an uprising in the Arab world remained a key supporting factor for gold, as a conference of 40 governments and international bodies agreed to press on with a NATO-led aerial bombardment of Libyan forces until Muammar Gaddafi complied with a U.N. resolution to end violence against civilians.
Spot gold added $4.25 an ounce to $1,420.20 an ounce by 0556 GMT -- still well below a lifetime high around $1,447 struck last week. It had dropped 0.1 percent on Tuesday as the talk of monetary tightening prompted selling.
"You've got to ask yourself, how bad is inflation? I think, really, you've got to get the economy moving before anything happens," said Jonathan Barratt, managing director of Commodity Broking Services in Melbourne.
"I think the market itself will probably get a little bit headstrong if, in fact, we continue to get concerns in the Middle East. I think gold is really being played out by what's happening in the Middle East and risk aversion trade."
Muammar Gaddafi's better armed and organised troops reversed the rapid westward advance of rebels on Tuesday as world powers meeting in London piled pressure on the Libyan leader to step down. [ID:nLDE72S033]
In Syria, President Bashar al-Assad sought to deflect the greatest challenge to his 11-year rule by mobilising tens of thousands of Syrians in mass rallies across the country, while in Yemen, protesters demanded an end to President Ali Abdullah Saleh's rule. [ID:nLDE72T006][ID:nLDE72S111] [ID:nLDE72S033]
U.S. gold futures for April rose $4.1 to $1,420.3 an ounce.
Japan's benchmark Nikkei average closed up 2.64 percent at 9,708.79 on Wednesday, while the broader Topix gained 1.87 percent to 866.09.
"There's a bit of physical buying but we've also seen some selling on the upside. The Middle East is tense, but people also think interest rates will go up in the euro zone, which is why the market is capped," said a dealer in Hong Kong.
"It's a mixed market. We may see support at $1,410, while the upside is capped at $1,420 and $1,422. We may trade within this range for the rest of the week. Speculators don't seem to know what to do."
In Singapore, a centre for bullion trading in Southeast Asia, dealers noted buying from Indonesia in an otherwise quiet physical maret.
Holdings on the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , were unchanged at 1,211.836 tonnes.
In currencies, the yen fell broadly on Wednesday, hitting 10-month lows against the euro and touching its lowest level in nearly three weeks versus the dollar as interest rate differentials widened in favour of U.S. and European currencies.
The euro was down a quarter percent at $1.4078 while the dollar index rose 0.1 percent against a basket of major currencies, although it stayed well off last week's 15-month lows of 75.340.
Gold demand to make jewellery, dental fillings and in electronics will jump by more than 5 percent this year, the biggest rise since 2000, metals research and consultant CPM Group said on Tuesday. [ID:nN29295604]
Precious metals prices 0556 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 1420.20 4.25 +0.30 0.05 Spot Silver 37.33 0.26 +0.70 20.97 Spot Platinum 1752.49 18.04 +1.04 -0.85 Spot Palladium 756.99 8.71 +1.16 -5.32 TOCOM Gold 3793.00 55.00 +1.47 1.72 49581 TOCOM Platinum 4704.00 98.00 +2.13 0.17 15775 TOCOM Silver 99.40 2.50 +2.58 22.72 1837 TOCOM Palladium 2030.00 74.00 +3.78 -3.20 240 Euro/Dollar 1.4089 Dollar/Yen 82.86 TOCOM prices in yen per gram. Spot prices in $ per ounce. (Reporting by Lewa Pardomuan; Editing by Himani Sarkar)
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