Gold rose the most in more than a week as a drop in the dollar and renewed optimism that Europe will act to tame the debt crisis boosted investor demand.
The greenback slumped as much as 0.9% against a basket of six major currencies, declining for the fourth straight day. European leaders meet this weekend in Brussels as they seek to contain the region’s fiscal crisis. Before today, gold dropped 12% since the end of August as escalating debt woes threatened global growth and commodity demand.
Gold futures for December delivery gained 1.9% to $1,643.60 U.S. an ounce Friday morning on the Comex in New York. A close at that level would be the biggest advance since Oct. 10. Before today, the metal was down 4.2% this week, heading for the first weekly drop in three.
Bullion slipped to $1,604.70 U.S. yesterday, the lowest since Oct. 5.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 on Sept. 6 as investors sought to diversify away from equities and some currencies. Before today, the metal advanced 13% this year.
Euro-area leaders may combine the region’s temporary and planned permanent rescue funds as of mid-2012 to release as much as 940 billion euros ($1.3 trillion U.S.) to fight the debt crisis. The plan is also aimed at breaking an impasse between Germany and France. Government leaders meet Oct. 23, and a second summit for Oct. 26 was set yesterday.
Silver futures for December delivery rose 3.3% to $31.27 U.S. an ounce, heading for the biggest gain since Oct. 6.
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