By Chanyaporn Chanjaroen June 28 (Bloomberg) -- Gold rose in London for a third day as investors bought the metal to protect their wealth amid financial market turbulence. Hedge-fund managers and other large speculators increased their net-long position in gold futures on the Comex in New York by 4 percent to 238,634 contracts in the week ended June 22, the U.S. Commodity Futures Trading Commission said. That is the highest since December. A long position is a bet on rising prices. “Gold is the ultimate currency and the ongoing global currency substitution in favor of gold will continue,” Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, said today in an e-mail. He forecast prices to rise to $1,300 an ounce in two months. Gold for immediate delivery rose 65 cents to $1,256.25 an ounce at 11:48 a.m. in London. Prices ended 0.1 percent lower at $1,255.60 last week. The metal for August delivery was 0.1 percent higher at $1,257.20 on the Comex in New York. Gold, up 14 percent this year, is set for a 10th straight annual increase as investors seek to protect their wealth against the crisis in Greece and other European nations struggling to repay debt. The euro has lost almost 14 percent this year against the dollar, prompting investors to buy gold products including coins. Prices of the metal rose to records in dollars, euros, pounds and Swiss francs this month. Bullion gained to $1,256 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,254 at the June 25 afternoon fixing. Support for gold, or clusters of buying when prices drop, is at $1,250 an ounce, Dincer said. Bullion for immediate delivery climbed to an all-time high of $1,265.30 an ounce on June 21. Should the price continue to rise, consumers in India, the world’s biggest gold user, may increase recycling of jewelry and trim imports, according to Tribhovandas Bhimji Zaveri Pvt., the Asian nation’s oldest retailer of gold jewelry. India’s gold imports slumped to between 16 and 17 metric tons in May, from 34 tons in April, Citigroup Inc. economists Rohini Malkani and Anushka Shah said in a report June 21. Silver Gains Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at a record 1,316.18 tons on June 25, according to the company’s website. Global holdings of the metal by ETFs rose four tons to 2,062.6 tons June 25, according to Bloomberg data from 10 providers. Silver, having rallied 13 percent this year, will rise to $22 an ounce before December, said Daniel Brebner, an analyst at Deutsch Bank AG in London, whose fourth-quarter outlook was accurate to within 0.7 percent. Silver for immediate delivery in London added 0.1 percent to $19.095 an ounce. Platinum advanced 1.1 percent at $1,588.63 an ounce, and palladium increased 0.8 percent at $482.35 an ounce. --With assistance from Madelene Pearson in Mumbai, Pham-Duy Nguen in Seattle and Nicholas Larkin in London. Editors: John Deane, Claudia Carpenter. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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