Gold climbed as a sustained weakness in Europe’s single currency fueled demand for safer assets. Bullion for immediate delivery rose 0.2 per cent to $US1225.05 an ounce in Singapore, after retreating yesterday from a record $US1249.40 touched on May 14. June-delivery futures in New York fell 0.2 per cent to $US1225.50. ''The gold price slipped modestly but remains at a high level,'' David Moore, Sydney-based analyst with Commonwealth Bank wrote in a report. ''Safe haven demand remains a support for the gold price.'' Gold has rallied 12 per cent this year following nine straight years of annual gains as investors sought safety from Europe’s fiscal turmoil. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, increased 3.04 metric tons to a record 1217.11 metric tons yesterday, according to figures on the company’s website. Investors are taking ''refuge in gold as a safe haven on fears that the eurozone debt crisis will spread,'' Eugen Weinberg, Frankfurt-based analyst with Commerzbank, wrote in a report. ''This is also attracting speculative financial investors, who see gold less as a hedge against financial market risks but basically want to profit from price movements.'' The euro fell toward its lowest level since April 2006 before a German report forecast to show confidence among analysts and investors in Europe’s largest economy deteriorated this month. The single currency weakened against 12 of its 16 major counterparts. David Wilson, London-based analyst with Societe Generale, cautioned recent gains in gold prices which may erode demand from retail investors in Asia. ''The fundamental background suggests that this recent upward move cannot continue forever,'' Wilson said. ''Demand is crumbling in Asia in the face of gold’s relentless upward march and the volatility in the metal’s price.'' Silver was little changed at $US18.9050 an ounce and platinum for immediate delivery gained 0.5 per cent to $US1679.50 an ounce, while palladium added 0.7 per cent to $US509 an ounce.

Source