Dec. 24 (Bloomberg) -- Gold advanced in Asian trade 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 rose as much as 0.4 percent to $1,385.95 an ounce before trading at $1,385 at 4:31 p.m. in Seoul. The metal is up 0.6 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.
Gold imports by India, the world's largest bullion consumer, rose 42 percent in November to 39.8 metric tons, from 28 tons a year ago, even as prices rose, the Economic Times reported today, citing the Bombay Bullion Association.
Platinum for immediate delivery rose 0.8 percent to $1,733 an ounce, set for a second weekly gain. The price has gained 18 percent this year.
Cash palladium gained 0.4 percent to $755.50 an ounce, heading for a second weekly increase. The metal has surged 85 percent this year.
Silver for immediate delivery was almost unchanged at $29.31 an ounce. The price has gained 74 percent in 2010.
--With assistance from Nicholas Larkin and Simon Kennedy in London, Jana Randow in Frankfurt and Madelene Pearson in Mumbai, Editors: Richard Dobson, Jake Lloyd-Smith.
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