By Nicholas Larkin and Kim Kyoungwha May 24 (Bloomberg) -- Gold climbed for the first time in a week in New York as a weaker euro revived demand for a haven and last week’s decline to the lowest level in more than two weeks boosted the metal’s allure. Gold futures slid 4.2 percent last week, the most since December, as some investors reduced positions to cover losses in other assets and the euro advanced. The euro fell against the dollar today after the Bank of Spain took over a failing regional lender. “Ongoing uncertainties created by the euro-zone debt situation will continue to draw investors toward safe-haven assets such as gold and the dollar,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report. “Bargain- hunting interest” is also supporting gold prices, he said. Gold futures for June delivery added $8.40, or 0.7 percent, to $1,184.50 an ounce by 8:07 a.m. on the Comex in New York. Prices dropped as low as $1,166 on May 21. Bullion for immediate delivery in London was 0.6 percent higher at $1,184.50. Gold rose to $1,183.75 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from $1,179.75 at the afternoon fixing on May 21. Spot prices fell for the first week in more than a month last week. Following the drop, “there’s some revived appetite for precious metals, including gold, as a decline in the euro reminds the market of risks linked to the region,” said Hwang Il Doo, a Seoul-based trader with KEB Futures Co. “The price declines are no more than a correction.” Tighter Sanctions European Union finance ministers last week pledged to stiffen sanctions imposed on high-deficit countries and ruled out setting up a mechanism to manage state defaults. The region’s debt crisis helped drive gold to a record $1,249.40 an ounce on May 14. Gold is up 8.1 percent this year and heading for a 10th annual gain. The Bank of Spain said on May 22 it appointed a provisional administrator to run CajaSur, a savings bank crippled by property-loan defaults. Spain’s worst recession in 60 years has driven up defaults at the country’s banks, which have made loans worth 454 billion euros ($564 billion) to finance construction and activities related to real estate. The dollar also strengthened as South Korean President Lee Myung Bak said today his nation will seek United Nations Security Council action against North Korea and halt trade with its communist neighbor over the torpedoing of a warship in March that killed 46 sailors. SPDR Holdings Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, rose to a record 1,220.15 metric tons on May 19. The fund’s assets were unchanged on May 21, its website showed. Platinum, palladium and silver rebounded from last week’s tumble. Palladium futures slumped 17 percent, platinum dropped 12 percent and silver fell 8.2 percent on concern that Europe’s debt crisis and slowing growth in China may erode consumption. Declines in platinum and palladium “are overdone,” Allidina Hussein, head of commodity research at Morgan Stanley & Co., wrote in a report yesterday. “Current levels seem an attractive entry point into what we consider a fundamentally supported market outlook.” Platinum for July delivery in New York gained 1.6 percent to $1,524.60 an ounce. Palladium for June delivery advanced 1.6 percent to $446.35 an ounce. Silver for July delivery added 1 percent to $17.83 an ounce. --Editors: John Deane, Dan Weeks. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.

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