Gold advanced for a third day on concern that the European debt crisis may escalate, increasing demand for haven investments. The price of the precious metal in euros gained to a record.
Immediate-delivery gold climbed as much as 0.2 per cent to $US1389.35 an ounce and traded at $US1388.40. The price jumped to $US1390.23 yesterday, the highest level since November 12. The February-delivery contract rose as much as 0.3 per cent to $US1390.60 an ounce on the Comex in New York.
“Investors are still jittery over the European debt problems,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. Yesterday's rally, when prices gained as much as 1.8 per cent, was “very strong,” Hwang said.
The euro yesterday fell to the lowest level in more than 10 weeks against the dollar on speculation that the region's sovereign-debt crisis will broaden. Investor concern has shifted to burgeoning debt in Spain and Portugal after European governments bailed out Ireland and Greece. Standard & Poor's said yesterday that it may cut Portugal's credit ratings.
“The market will continue to go after each individual country until the European Union steps forward with a credible way of dealing with the credit issues and questions held by the market,” said Douglas Borthwick, head of foreign-exchange trading at Stamford, Connecticut-based Faros Trading.
Gold denominated in euros gained for a fourth day, climbing as much as 0.2 per cent to 1069.993 euros per ounce, an all-time high.
November rally
Bullion rose 2 per cent in November, the fourth monthly gain, and touched a record $US1424.60 an ounce on November 9, on investor demand for protection against the debasement of currencies. Central banks have maintained low interest rates while governments have spent trillions of dollars to spur growth.
UBS on November 29 cut its one-month forecast for gold to $US1325 an ounce from $US1425. “Year-end profit-taking remains probable,” UBS analyst Edel Tully wrote yesterday.
Spot silver rebounded from a loss of 0.3 per cent to gain 0.2 per cent to $US28.1257 an ounce. UBS yesterday cut its one- month silver forecast to $US25.50 from $US30, while maintaining a three-month estimate of $US27.
Cash palladium increased 0.4 per cent to $US702.25 an ounce after falling as much as 0.6 per cent. Spot platinum climbed 0.8 per cent to $US1670.50 an ounce.