Gold rose for a second straight day as mounting government debt in Europe boosted demand for the precious metal as a haven. The euro declined against the dollar after Moody’s Investors Service cut Portugal’s credit rating to junk, renewing concerns another European nation will need a bailout. Gold fell in the previous two weeks as Greece avoided a default. “You’re getting a flight-to-quality fear coming in for gold,” said Adam Klopfenstein, a senior market strategist at broker Lind-Waldock in Chicago. “With the anxieties in Portugal and the ongoing debt-ceiling problems in the U.S., there are too many bullish cases for gold.” Gold futures for August delivery rose $16.60, or 1.1 percent, to $1,529.30 an ounce at 10:54 a.m. on the Comex in New York. The metal advanced 2 percent yesterday. 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. Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter, recommended holding gold in foreign currencies to hedge against the relative strength of the dollar. “We remain bullish of gold in non-U.S. dollar terms,” Gartman said in his daily note. “In the course of the past two days, what had been a position under attack has become a position of authority once again.” Silver futures for September delivery rose 51 cents, or 1.4 percent, to $35.92 an ounce on the Comex. Platinum futures for October delivery fell $3.60, or 0.2 percent, to $1,738.50 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery slipped $1.10, or 0.1 percent, to $774.55 an ounce on the Nymex. 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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