Gold declined for the first time in seven days, joining a drop in other commodities including oil, as concern about Europe’s debt crisis drove the dollar higher, damping demand for raw materials priced in the U.S. currency. Immediate-delivery bullion fell as much as 0.5 percent to $1,545.55 an ounce, and was at $1,547.95 by 4:04 p.m. in Singapore. Gold touched $1,557.05 yesterday, the highest price since June 22, on concern the debt crisis in Europe that began in Greece may spread to other nations in the region, sending the metal priced in euros and pounds to all-time highs. “Right now investors are in risk-aversion mode as Europe’s debt crisis has once again been brought to the fore, and gold is benefiting from this” Zhao Jingjing, an analyst at Essence Futures Co., said by phone from Beijing. “While a stronger dollar may limit gold’s gains, it isn’t uncommon to see both rising in tandem as investors seek a safe haven.” Futures on the Comex in New York were little changed at $1,548.10 an ounce, while the metal jumped to records of 1,117.554 euros and 980.05 pounds today. The dollar advanced to a three-month high against a six-currency basket including the euro as soaring yields on Italian bonds raised concern it won’t be able to finance its debt. December-delivery gold on the Shanghai Futures Exchange ended the day little changed at 322.07 yuan a gram ($1,547.43 an ounce), while bullion for June delivery on the Tokyo Commodity Exchange shed 0.8 percent to 3,990 yen per gram ($1,554.83 an ounce). Greece, Italy European finance ministers revived the prospect of bond buybacks to ease Greece’s plight and declined to rule out a temporary default as they struggled to contain a crisis that has spread to Italy. The region’s third-largest economy has the second-highest debt load after Greece, with 175 billion euros in debt maturities this year and 1.6 trillion euros of bonds outstanding. Gold may breach $1,600 on growing inflation expectations and the possibility of Europe’s sovereign debt crisis spreading to the U.S. and Japan, Cameron Alexander, senior analyst at GFMS Ltd., said today in a conference in Beijing. “In the short term, prices could retrace from current levels,” Alexander said. “$1,450 is possible over the next three months, with prices in that region most likely to be very well supported by bargain hunting and stock replenishment.” Silver for immediate delivery dropped 1.8 percent to $35.1588 an ounce, and futures for September delivery declined 1.4 percent to $35.215 an ounce. Spot platinum fell 0.6 percent to $1,711.80 an ounce and palladium shed 2 percent to $754.25 an ounce. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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