Gold, trading little changed, may advance for the first time in three days as concern that the European sovereign-debt crisis will continue spurs investors? demand for a haven. Platinum and palladium increased.
Immediate-delivery bullion was $1.40 higher $1,381.50 an ounce at 12:19 p.m. in Seoul after swinging between losses and gains of as much as 0.3 percent. The metal is up 0.4 percent this week, set for the first weekly gain in three.
?Gold prices have risen largely on the sovereign risk in Europe and is likely to continue its rally as the concern lingers,? said Chris Kwon, a trader at Seoul-based KTB Securities Co. ?A yearend correction seems to be almost done and bullion will probably soon break the $1,400 mark again.?
The European Central Bank will keep its key interest rate unchanged in 2011 amid low inflation and fallout from the debt crisis, said 12 of 17 economists in a Bloomberg News survey. Even after Greece and Ireland received bailouts, the cost of insuring Greek debt rose yesterday to the highest level in a month and investors speculate Portugal may require aid next.
Gold, which reached an all-time high of $1,431.25 an ounce on Dec. 7, has climbed 26 percent this year, the 10th annual advance, as investors sought protection from weaker currencies and the sovereign-debt crisis. That tops returns from U.S. stocks, with the Standard & Poor?s 500 Index gaining by 13 percent this year.
Eleven of 19 traders, investors and analysts surveyed by Bloomberg, or 58 percent, said that the metal will rise next week on concern that Europe?s debt woes will continue to boost demand for wealth protection.
Christmas Holiday
The February-delivery contract fell 0.5 percent to $1,380.50 an ounce on the Comex in New York yesterday, the biggest drop since Dec. 16. The futures market is closed today for the Christmas holiday.
?Investors go on holidays and just want to shore up their earnings,? said Ben Westmore, an analyst at National Australia Bank Ltd. in Melbourne. The metal remains well-supported and ?on annual average terms we see 2011 being a better year than 2010,? Westmore said by phone.
Silver for immediate delivery was little changed at $29.3050 an ounce. The price has gained 74 percent in 2010.
Cash palladium gained 0.2 percent to $754.25 an ounce, heading for a second weekly increase. The metal has surged 85 percent this year.
Platinum for immediate delivery rose 0.8 percent to $1,732.25 an ounce, set for a second weekly gain. The price has gained 18 percent this year.
To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at Rdobson4@bloomberg.net
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