Gold futures rose the most in a week after mounting debt woes in the U.S. and Europe spurred demand for the metal as a store of value. Silver surged the most in four months.
A U.S. congressional committee failed to reach agreement on reducing the budget deficit. Global equities have tumbled this month as Europe’s credit crisis escalated. Holdings in exchange- traded products backed by gold climbed to a record yesterday.
“The uncertainty around the budget-deficit talks is positive for gold in the long run,” Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “We have seen an increase in physical interest.”
Gold futures for December delivery gained 1.4 percent to settle at $1,702.40 an ounce at 1:54 p.m. on the Comex in New York, the biggest gain since Nov. 11. Yesterday, the metal touched $1,667.10, the lowest for a most-active contract since Oct. 25.
Holdings in ETPs backed by physical metal climbed 2 metric tons yesterday to an all-time high of 2,341.94 tons, data compiled by Bloomberg show.
Silver futures for March delivery rose 5.9 percent to $33.031 an ounce on the Comex, the largest increase since July. 13. Yesterday, the metal touched $30.74, the lowest since Oct. 21.
On the New York Mercantile Exchange, palladium futures for December delivery gained 2.6 percent to $601.15 an ounce. Platinum futures for January delivery climbed 1.8 percent to $1,571 an ounce.
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