Gold futures rose on speculation that wide swings in currency markets will boost demand for the precious metal as a haven.
The dollar fell against a basket of six major currencies after three straight weekly gains. Gold has climbed 26 percent this year, reaching a record $1,432.50 an ounce on Dec. 7, as Europe’s debt crisis and low U.S. interest rates spurred investment in precious metals.
“The big concern is debt, not only ours, but European debt,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “It means further currency volatility, which will drive capital into gold.”
Gold futures for February delivery rose $2.40, or 0.2 percent, to settle at $1,382.90 at 1:38 p.m. on the Comex in New York.
China, the world’s second-biggest gold buyer, increased interest rates for the second time this quarter.
“Higher rates can draw capital away from gold,” Lesh said.
Gold assets held in exchange-traded products fell 3.12 metric tons to 2,101.3 tons on Dec. 23, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,114.6 tons on Dec. 20 and are up 17 percent this year.
India is the largest buyer.
Silver futures for March delivery fell 7.3 cents, or 0.2 percent, to $29.255 an ounce on the Comex. The metal has climbed 74 percent this year.
Platinum futures for April delivery rose $13.20, or 0.8 percent, to $1,741 an ounce on the New York Mercantile Exchange.
Palladium futures for March delivery gained $9, or 1.2 percent, to $767.10 an ounce.
This year, platinum has advanced 18 percent, and palladium has surged 88 percent.