Gold futures rebounded from the lowest price in eight weeks on demand for a haven from weakening currencies.
The euro fell as much as 0.8 per cent on renewed debt concerns in Europe. Gold surged to a record $US1266.50 on June 21 and also reached all-time highs last month in euros, UK pounds and Swiss francs. Earlier today, the metal touched $US1175.10 an ounce, the lowest level since May 21.
"It's a good time to buy gold while it's on sale," said Matt Zeman, a trader at LaSalle Futures Group in Chicago. "For buy-and-hold types of people, fiscal irresponsibility is too widespread to completely trust fiat currencies."
Gold futures for August delivery rose $US9.80, or 0.8 per cent, to $US1191.70 on the Comex in New York, the biggest gain for a most-active contract since July 13. The metal has gained 8.7 per cent this year.
European regulators are examining 91 banks to determine whether they can survive potential losses on sovereign-debt holdings. Results will be released July 23.
"Investors are nibbling at the long side of gold," said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a broker in Chicago. "There's a small degree of uncertainty heading into the bank-stress test."