Gold rallied over 1 percent to a 2-1/2 week peak on Tuesday and euro-priced bullion set a fresh record high as concern over sovereign debt levels in the eurozone fuelled buying of the metal as a safe store of value. A weekend rescue package for Ireland failed to assuage investor jitters over the spread of debt problems in the eurozone, analysts said.
Spot gold was trading at $1,385.50 an ounce at 1643 GMT against $1,368.09 late in New York on Monday, having earlier touched a session high of $1,385.95. US gold futures for December delivery rose $20.70 an ounce to $1,386.70. "Even the strong US dollar could not push gold in dollar terms lower," said Eugen Weinberg, an analyst at Commerzbank. "This suggests that the US dollar is not perceived as the primary safe haven right now, but rather gold." Spot gold was heading for a fourth consecutive month of gains, matching a similar winning run from November 2008. Bullion is up around 26.4 percent in the year to date.
"Credit markets dismissed news of a definite bailout for Dublin, with the broader market still reluctant to turn positive on the monetary union," said VTB Capital in a note. Euro-priced gold jumped some 2 percent to a fresh record at 1,067.93 euros an ounce and was on track for its biggest monthly gain since May - up 9 percent - when concerns over Portugal's financial health first battered the markets. Gold priced in euros was later at 1,061.74 euros an ounce. Physical buying in Asia remained supportive of gold prices.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to 1,286.603 tonnes by November 29 from 1,285.084 tonnes on November 22. The International Monetary Fund has slowed the rate of selling its gold by 40 percent in October from the previous month, as interest among central banks to own the metal as a hedge against economic uncertainty rose.
Among other precious metals, silver was up 3.5 percent at $28.07 an ounce against $27.12, 14 percent higher on the month, and palladium was on track for its fifth straight monthly rise, up 7.9 percent on the month at $695.97. Platinum was up 0.87 percent at $1,657.49 an ounce. On a monthly basis, it bucked the overall positive trend in the complex, heading for a more than 2 percent drop, its first monthly decline since August.