Gold Rises on Demand for Haven Amid Mounting European Debt Woes

By Pham-Duy Nguyen
 
Dec. 21 (Bloomberg) -- Gold prices rose for the third straight session on speculation that Europe's debt woes will spread, boosting demand for the precious metal as a store of value. 
 
The euro fell against the dollar after Fitch Ratings said it may lower Greece's credit rating to below investment grade. Gold has gained 27 percent this year, reaching an all-time high of $1,432.50 an ounce on Dec. 7, as Europe's debt crisis escalated.
 
"Sovereign-debt worries continue to weigh on the market," said Matthew Zeman, a metal trader at LaSalle Futures Group in Chicago. "Gold looks to move higher in the new year."
Gold futures for February rose $2.70, or 0.2 percent, to settle at $1,388.80 at 1:44 p.m. on the Comex in New York. 

The price gained 1.1 percent in the previous two sessions.
The metal is headed for a 10th straight annual gain amid low interest rates in the U.S. and rising commodity demand in China. Investment in 10 leading exchange-traded funds backed by gold has climbed 18 percent this year. 
 
"There's still a backdrop of sovereign debt in Europe and inflation in China that will keep gold well bid," said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. 
 
Gains may be limited for the rest of the year, he said.
"We're looking at a shallow correction in prices over the next two weeks," Klopfenstein said. "Those who have caught a nice run in gold are looking to book profit."
Silver futures for March delivery rose 3.9 cents, or 0.1 percent, to $29.394 an ounce on the Comex. The metal has jumped 74 percent this year.
Palladium futures for March delivery rose $8.30, or 1.1 percent, to $753.05 an ounce on the New York Mercantile Exchange.
Platinum futures for April delivery climbed $11.40, or 0.7 percent, to $1,727.10 an ounce.
Palladium has surged 84 percent this year. and platinum is up 17 percent.
 
Source: http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=asRs9q3LBhGs