Gold may decline for a second day in London as an agreement by European leaders on a multibillion- euro rescue package for Greece curbs demand for the metal as a protection of wealth. Leaders announced 159 billion euros ($229 billion) of new aid for Greece yesterday after talks in Brussels. They also enabled their 440-billion euro rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. Gold is set for the first weekly decline in three after touching a record on July 19. “The EU leaders’ summit in Brussels helped to alleviate fears over the next aid package to Greece and problems with peripheral debt in the monetary union,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. Still, U.S. and European debt concerns “are unlikely to dissipate just yet and would limit any pullback in gold.” Immediate-delivery gold slipped $1.05, or 0.1 percent, to $1,589.65 an ounce by 11:19 a.m. in London. The metal reached an all-time high $1,610.10 on July 19 and is down 0.2 percent this week. Gold for August delivery was up 0.2 percent at $1,590.20 an ounce on the Comex in New York after reaching a record $1,610.70 on July 19. Open interest in Comex futures climbed to a six-month high of 546,601 contracts on July 20. Bullion fell to $1,588 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,601 at yesterday’s afternoon fixing. Firewall Installed Europe-area leaders have erected a firewall around Spain and Italy to end the 21-month sovereign bond crisis and risked temporary default to lighten Greece’s debt burden. The Greek financing package will consist of 109 billion euros from the euro region and the International Monetary Fund. Financial institutions will contribute 50 billion euros after agreeing to a series of bond exchanges and buybacks. Gold is up 12 percent this year, heading for an 11th straight annual gain, the longest winning streak since at least 1920 in London. The MSCI All-Country World Index of equities gained 4.6 percent in 2011, the Standard & Poor’s GSCI Index of 24 commodities is up 10 percent and Treasuries returned 3.1 percent, according to a Bank of America Merrill Lynch index. “While I’m still medium- and long-term bullish, I think that we’ve rallied too far, too fast, and too many people are on one side of the boat,” Jim Pogoda, an investor in Summit, New Jersey, and a former precious-metals trader for Mitsubishi International Corp., said in an e-mail. “I think we can pare $50-$100, and not destroy the long-term bullish momentum.” U.S. Deadline Looms Weeks of negotiations between U.S. lawmakers have yielded no final deal to raise the $14.3 trillion borrowing limit before an Aug. 2 deadline. President Barack Obama and House Speaker John Boehner pressed for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code. Holdings in exchange-traded products were at 2,121.2 metric tons yesterday, little changed from a record set the previous day, data compiled by Bloomberg show. Sixteen of 32 traders, investors and analysts surveyed by Bloomberg, or 50 percent, said bullion will rise next week. Nine predicted lower prices and seven were neutral. Silver for immediate delivery fell 0.1 percent to $39.3613 an ounce. Palladium declined 0.6 percent to $803.50 an ounce after climbing to $811.13, the highest price since June 13. Platinum was up 0.1 percent at $1,786 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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