New York, Bloomberg 09/13/11 - Gold futures rose due to increased debt crisis of Europe and the decline in the dollar boosted demand for the metal as an alternative asset.
German Chancellor Angela Merkel said she would not let the Greeks get into 'insolvency uncontrollable' where the politicians are still trying to limit the spread of the crisis to other euro member countries. Greece's budget gap widened 22 percent in the eight months ended August 31. The greenback fell as much as 1 percent against a basket of six major currencies.
'Concerns about Greece has not abated, "said Sterling Smith, an analyst with Country Hedging Inc. in St. Paul, Minnesota, in a telephone interview. "The weakened dollar also lent support."
Gold futures for December delivery rose $ 16.80, or 0.9 percent, to close at $ 1,830.10 an ounce on the Comex, New York. Prices rose as high as $ 1,847.50 in trading after the settlement. Metal has climbed 29 percent this year, reaching a record $ 1,923.70 on Sept. 6.
Greece opportunity to feel the default in the next five years has jumped to 98 percent, based on standard pricing model of credit-default swaps.
'Euro zone debt crisis and the potential for transmission remains the dominant issue, "said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, in a report. 'Gold should remain in demand as a safe haven. "
Silver futures for December delivery rose 97.6 cents, or 2.4 percent, to $ 41.193 an ounce on the Comex. Prices have climbed 33 percent this year.
On the New York Mercantile Exchange, platinum futures for October delivery rose $ 4.10, or 0.2 percent, to $ 1,813.50 an ounce. Palladium futures for December delivery rose $ 17.15, or 2.4 percent, to $ 728.50 an ounce.
