Gold rose to a seven-week high as fluctuations in currency markets boosted demand for the precious metal as an alternative investment. The euro fell against the dollar on speculation that the Greek government will struggle to pass austerity measures to avoid a default. Gold priced in U.K. pounds rose to a record. “Gold is in a unique position of being able to go higher, despite a stronger dollar, which is a very bullish signal,” said Matthew Zeman, a strategist at Kingsview Financial in Chicago. “A lot of nations are running deficits that are not sustainable in the long run. There comes a point where people just don’t believe in paper currencies.” Gold futures for August delivery rose $10.20, or 0.7 percent, to $1,556.60 an ounce at 9:47 p.m. on the Comex in New York. Earlier, the metal reached $1,559.20, the highest for a most-active contract since May 2, when the price reached a record $1,577.40. The commodity headed for the seventh straight gain, the longest rally since April. Before today, gold climbed 25 percent in the past 12 months as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of the metal as an alternative to currencies. The price denominated in euros reached an all-time high on May 25. To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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