May 24 (Bloomberg) -- Gold futures rose to a three-week high as concern mounted that Europe’s sovereign-debt crisis will escalate, and the dollar drop’s spurred demand for the metal as an alternative asset. Silver jumped 3.5 percent.
The greenback fell for the first time in three sessions against a basket of major currencies. The Greek government endorsed an accelerated asset-sale plan and 6 billion euros ($8.4 billion) of budget cuts to win extra aid. Gold priced in euros climbed to a record for the second straight day.
“People see the whipsaw in the currency market, and they want to buy gold and call it a day,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock in Chicago.
Gold futures for June delivery gained $7.90, or 0.5 percent, to settle at $1,523.30 an ounce at 1:41 p.m. on the Comex in New York, the highest closing price for a most-active contract since May 3.
The metal has gained 28 percent in the past year, climbing to a record $1,557.40 on May 2. Gold in euros reached an all-time high of 1,082.69 today.
“People view gold as a store of value and an alternative to the dollar,” said Jeff Sherman, who helps manage $11 billion at DoubleLine Capital LP in New York. “We are still long on gold.”
Goldman Sachs Group Inc., after recommending selling commodities last month, said it is turning “more bullish” on raw materials.
“There’s a move in commodities across the board,” said Klopfenstein at Lind-Waldock. “Gold and silver are getting well-bid.”
Silver futures for July delivery rose $1.224 to $36.128 an ounce. The price has tumbled 28 percent from a 31-year high of $49.845 on April 25.
Silver has been “very volatile,” Sherman of DoubleLine said. He said that he bet on a price decline in the high $30s.
“People have not stepped back,” Sherman said. “We think that the low $30s is probably the fair value.”
Palladium futures for June delivery rose $3.45, or 0.5 percent, to $735.25 an ounce on the New York Mercantile Exchange.
Platinum futures for July delivery climbed $6.60, or 0.4 percent, to $1,762.50 an ounce.
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