By Claudia Carpenter May 4 (Bloomberg) -- Gold climbed to a five-month high in London on signs of increased demand for the metal as an alternative to the euro and other currencies. Bullion rose to records in euros, Swiss francs and British pounds, extending gains this year as concern about sovereign debts in Europe spurred investors to seek a hedge. Government workers in Greece, which is being bailed out by the European Union and the International Monetary Fund, began the first day of a 48-hour strike against budget cuts. “Gold is incorporating a premium due to currency and default risk,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “There is a high risk aversion among gold investors, and it’s all about safe haven.” Bullion for immediate delivery jumped as much as $6.95, or 0.6 percent, to $1,189.13 an ounce, the highest intraday price since Dec. 4, and was at $1,186.80 at 12:03 p.m. local time. Futures for June delivery rose 0.3 percent to $1,186.90 on the Comex in New York. Prices in dollars are still 3.2 percent below the record $1,226.56 an ounce on Dec. 3. That signals more confidence in the dollar than European currencies or the yen, Dincer said. Gold has gained 8.1 percent this year in dollars, 9.9 percent in yen, 14 percent in Swiss francs and 18 percent in euros. Higher ‘Fixing’ Gold rose to $1,184.25 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,179.25 at the afternoon fixing on April 30. No fixing took place yesterday, when U.K. financial markets were closed for a national holiday. Bullion will trade at $1,100 an ounce in six months and $1,050 in a year, below previous forecasts of $1,250 and $1,175, Robin Bhar, an analyst at Credit Agricole Corporate & Investment Bank in London, said in a report today. The IMF’s gold reserves declined by 18.5 metric tons (about 595,000 ounces) in March following the sale of 5.6 tons in February, according to the World Gold Council. Greek state workers escalated protests against 30 billion euros ($40 billion) of additional wage cuts and tax increases. The country’s prime minister has called on citizens to endure more sacrifices in return for an EU-IMF loan bailout before debts come due this month. Agreement was reached over the weekend on a rescue plan. “Early indications are that it should be reasonably constructive for risk assets and provide some temporary relief, at least, for the beleaguered high-yielding European bond markets and the euro,” Bhar said of the bailout accord. Concern about sovereign debt issues is driving investor demand for gold, according to Eliane Tanner, an analyst at Credit Suisse Group AG in Zurich. Platinum for immediate delivery dropped 0.3 percent to $1,718.75 an ounce and palladium fell 0.4 percent to $539 an ounce. Silver declined 0.5 percent to $18.705 an ounce.

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