Gold futures rebounded from the lowest in almost four
weeks after mounting debt woes in the US and Europe spurred demand for
the metal as a store of value.
A US congressional committee failed to reach agreement
on reducing the budget deficit. Global equities have tumbled this month
as Europe's credit crisis escalated. Holdings in exchange-traded
products backed by gold climbed to a record yesterday.
"The uncertainty around the budget-deficit talks is
positive for gold in the long run," Sterling Smith, an analyst at
Country Hedging in St. Paul, Minnesota, said. "We have seen an
increase in physical interest."
Gold futures for December delivery gained 1.1 per cent
to $US1696.30 an ounce on the Comex in New York. Yesterday, the metal
touched $US1667.10, the lowest since October 25.
Holdings in ETPs backed by physical metal climbed 2
metric tons yesterday to an all-time high of 2341.94 tons, data
compiled by Bloomberg show.
Silver futures for March delivery rose 2.6 per cent to
$US32.005 an ounce on the Comex. Yesterday, the price slumped 4 per
cent.
Bloomberg
