Gold Gains for Second Day as Europe Debt Concerns Boost Demand for Haven

Gold rose for a second straight day as mounting government debt in Europe boosted demand for the precious metal as a haven.

The euro declined against the dollar after Moody’s Investors Service cut Portugal’s credit rating to junk, renewing concerns another European nation will need a bailout. Gold fell in the previous two weeks as Greece avoided a default.

“You’re getting a flight-to-quality fear coming in for gold,” said Adam Klopfenstein, a senior market strategist at broker Lind-Waldock in Chicago. “With the anxieties in Portugal and the ongoing debt-ceiling problems in the U.S., there are too many bullish cases for gold.”

Gold futures for August delivery rose $16.50, or 1.1 percent, to settle at $1,529.20 an ounce at 1:43 p.m. on the Comex in New York. The metal advanced 2 percent yesterday.

Prices have climbed 28 percent in the past 12 months as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of the metal as an alternative to currencies. The price denominated in euros reached an all-time high on May 25.

Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, recommended holding gold in foreign currencies to hedge against the relative strength of the dollar.

“We remain bullish of gold in non-U.S. dollar terms,” Gartman said in his daily note. “In the course of the past two days, what had been a position under attack has become a position of authority once again.”

Silver futures for September delivery rose 50.6 cents, or 1.4 percent, to $35.916 an ounce on the Comex.

Platinum futures for October delivery fell $8.70, or 0.5 percent, to $1,733.40 an ounce on the New York Mercantile Exchange.

Palladium futures for September delivery slipped $2.45, or 0.3 percent, to $773.20 an ounce on the Nymex.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at

To contact the editor responsible for this story: Steve Stroth at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.