Gold futures rose for the second straight day in New York as renewed concern that the Greek debt crisis will worsen and signs of a slowing global economy spurred demand for the metal as a store of value. The MSCI All-Country World Index fell as much as 3 percent, and the Standard & Poor’s 500 Index slipped 2.8 percent after German Chancellor Angela Merkel’s government said it is preparing plans to shore up banks in the event that Greece fails to meet the terms of its aid package and defaults. President Barack Obama yesterday proposed a $447 billion plan to create jobs and boost the U.S. economy. “The Greece problem is huge, and people also are skeptical about how much of Obama’s plan will be translated into action,” Frank Lesh, a trader at FuturePath Trading, said in a telephone interview from Chicago. “Equities are tumbling, and the flight to safety has begun.” Gold futures for December delivery gained $11.70, or 0.6 percent, to $1,869.20 an ounce at 12:36 p.m. on the Comex in New York. Before today, the metal declined 1 percent this week, heading for the second drop in three. Prices rose to a record $1,923.70 on Sept. 6. Budget-Cutting Plans Obama, speaking before a joint session of Congress, demanded six times that lawmakers act “right away” on a plan that would boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small business owners. Federal Reserve Chairman Ben S. Bernanke said policy makers will discuss the tools they may need to use to aid the recovery at their meeting this month. Canadian Finance Minister Jim Flaherty said Greece may have to leave the euro if it fails to press ahead with its budget- cutting plans. Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. Before today, the metal rallied 31 percent this year, outperforming global stocks, commodities and Treasuries. Yesterday, CME Group Inc., the parent company of the Comex, raised the margin requirement for the Cleared OTC London Gold futures contract to $9,450 per contract, the same level as that for New York gold futures. To contact the reporter on this story: Debarati Roy in Mumbai at droy5@bloomberg.net To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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