Gold climbed on concern that Europe’s debt crisis may deepen after Slovakia’s lawmakers rejected an enhancement of the region’s bailout fund, spurring demand for haven assets. Bullion for immediate delivery rose as much as 0.5 percent to $1,670.22 an ounce, and last traded at $1,667.43 at 12:13 p.m. Singapore time. December-delivery futures climbed as much as 0.7 percent to $1,671.80 an ounce before trading at $1,668.50 on the Comex in New York. “In a world where growth is slowing and we’re yet to see a conclusive initiation of any kind of policy from policy makers, until that trend changes, I think gold is a haven,” said Andrew Gardner, an analyst at MF Global Australia Ltd. Policy makers in Slovakia, the only country in the 17- nation euro area that hasn’t approved a planned reinforcement of the European Financial Stability Facility, yesterday rejected the motion without giving a timeframe for a new vote, driving Asian equities and oil lower. “Commodities will generally be under pressure until a significant announcement is made, which doesn’t look like anything is imminent,” Gardner said by phone from Sydney today. “Gold will be stuck in this malaise because of deflationary headwinds.” Gold prices have risen 17 percent this year, compared with a 6.7 percent drop in oil prices, as concern that the European debt crisis may hamper global growth dimmed expectations for energy demand, while boosting bullion’s appeal as a haven. Crude in New York last traded at $85.30 a barrel. Deflation Risks “The highest correlation that gold has ever had, over a hundred years at least, is the oil price,” said Gardner. “If oil goes down to $60, that’s deflationary. I don’t think it will stay there a long time but this is the momentum the market has gotten into at the moment.” The ratio of gold to oil was around 19.5 today, compared with an average of about 14.5 in the past 20 years, according to data compiled by Bloomberg. The ratio climbed to over 22 in August, the highest level since March 2009. “What happened in the 1930s is at first there was deflation and then they inflated their way out of the problem,” Gardner said. “Gold hasn’t been doing well because deflation has risen as a risk relative to inflation and oil is inherently the biggest contributing factor to inflation.” Cash silver gained as much as 0.5 percent to $32.225 an ounce and December-delivery futures rose as much as 0.7 percent to $32.22 an ounce. Spot platinum advanced 0.8 percent to $1,533.75 an ounce and palladium climbed 0.3 percent to $608.50 an ounce. To contact the reporter for 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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