Gold gained for a second day, advancing alongside other commodities, before European Union leaders hold a summit this week amid speculation that Spain may accept credit from a rescue fund, weakening the dollar.
Spot gold rose as much as 0.3 percent to $1,752.10 an ounce and was at $1,751.20 at 9:08 a.m. in Singapore, extending yesterday’s 0.6 percent advance. The metal for December delivery climbed 0.3 percent to $1,751.70 an ounce on the Comex.
Germany is open to Spain seeking the precautionary credit line from Europe’s rescue fund, two senior German coalition lawmakers said, prompting speculation that the Iberian nation may take the aid and help contain the debt crisis. The dollar fell 0.3 percent against a six-currency basket including the euro, spurring gains in oil and copper.
“If Spain’s financial troubles can be kept in check, it helps stabilize market sentiment,” said Xiang Nan, an analyst at CITICS Futures Co., a unit of China’s biggest listed brokerage. “The weaker dollar is also good for all commodities including gold.”
EU leaders are set to gather in Brussels for two days starting tomorrow. Gold is on course for a 12th annual gain as central banks from Europe to the U.S. boost stimulus to try to strengthen their economies.
Holdings in exchange-traded products were little changed at 2,577.25 metric tons yesterday after climbing to a record 2,582.98 tons on Oct. 11, data compiled by Bloomberg show.
Spot gold of 99.99 percent purity was little changed at 351.70 yuan a gram ($1,747.50) on the Shanghai Gold Exchange. Volumes rose to 4,686 kilograms yesterday, the highest in more than a week, from 4,164 kilograms on Oct. 15.
Cash silver gained as much as 0.6 percent to $33.1537 an ounce, before trading at $33.12. Spot platinum rose 0.5 percent to $1,651.65 an ounce, climbing for a second day. Palladium also advanced for a second day, adding 0.4 percent to $642 an ounce.
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