Gold prices rose the most in a week on speculation that demand will increase amid escalating debt concerns in Europe and after a South Korean naval vessel sank near the border with North Korea. "The bailout of Greece accomplished by the Europeans is only temporary," said Dennis Gartman, an economist and the Gartman Letter's editor. "The future of the euro remains dreadfully weak. That means those central banks who had been buying euros as a reservable asset, but are still fearful of owning more dollars, have no choice but to move toward gold." The euro gained as much as 1.1 per cent against the dollar. European leaders endorsed a Franco-German proposal to help Greece with a mix of International Monetary Fund and bilateral loans. Gold priced in euros reached a record on March 5. Gold futures for June delivery climbed $US11.30, or 1 per cent, to $US1105.40 an ounce on the Comex in New York, the biggest gain for a most-active contract since March 16. The price fell 0.2 per cent this week. The euro rebounded from a 10-month low after European leaders put the IMF on standby to help debt-stricken Greece and sought to reduce concerns that divisions on the issue would escalate the nation's fiscal crisis. The Greek plan "will no doubt give risk sentiment a short- term boost and is partially behind the gains with gold," James Moore, an analyst at TheBullionDesk.com in London, said in a report. Concern that government debt may expand "will continue to prompt diversification away from fiat currencies and toward more tangible assets, particularly precious metals," he said.

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