Gold climbs most in three weeks on rekindled Europe debt concern

08:26, July 14, 2010      

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Gold futures on the COMEX Division of the New York Mercantile Exchange jumped the most in three weeks on Tuesday, as the downgrade of Portugal's debt let the spotlight return to European financial woes. Silver and platinum both bounced off.

The most active gold contract for August delivery climbed 14.8 dollars, or 1.2 percent, to finish at 1,213.5 U.S. dollars.

Moody's investors Service slashed Portugal's credit rating by two notches on Tuesday from Aa2, to A1, which is a still investment grade, cited the nation's feeble economic growth and weak economic prospects, suggesting the European financial crisis is far from over. Gold rallied as the rekindled fear over eurozone debt crisis offset the recent surge in investor confidence over the global economic prospects, and made the precious metal more appealing as an alternative safe haven.

Alcoa Inc., the largest U.S. aluminum producer, reported second- quarter sales and profit late Monday, which topped economists's estimates, indicating higher global demand for the metal, and added upward pressures on metals in general.

Traders also suggested that increasing physical demand for gold, as well as weaker dollar and rising crude oil price all contributed to support gold.

September silver was up 34.0 cents, or 1.9 percent, to settle at 18.257 dollars per ounce, October platinum rose 20.1 dollars, or 1.3 percent, to settle at 1535.4 dollars per ounce.



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