By Kim Kyoungwha June 22 (Bloomberg) -- Gold rebounded from the biggest decline in a month as demand for wealth protection remained undiminished on concern that Europe’s debt crisis may curb the global economic recovery. Bullion for immediate delivery strengthened as much as 0.6 percent to $1,240.45 an ounce and traded at $1,238.30 an ounce at 1:44 p.m. in Singapore. The metal touched an all-time high of $1,265.30 yesterday. August-delivery futures were little changed at $1,239.30 an ounce. Gold “is profiting from its status as a safe haven and is likely to remain in strong demand as long as doubts persist about the chances of successfully resolving the debt crisis in Europe,” Eugen Weinberg, head of commodity research with Commerzbank AG, wrote in a report. “Investors are therefore still trying to protect their investments with gold.” Central banks, pension funds and individual buyers have amassed their holdings in gold to shield their wealth from Europe’s financial turbulence and uncertainty in the global economy. Assets in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, have risen 15 percent in 2010 to a record 1,307.96 tons, figures on the company’s website showed. European Central Bank governing council member Christian Noyer said some banks in the 16-nation region are facing funding problems. The euro has weakened 14 percent this year, while gold has rallied 13 percent. Platinum, Palladium Russia and the Philippines increased their gold holdings in the first quarter, according to the World Gold Council, joining purchases in 2009 by India, Mauritius and Sri Lanka. Platinum and palladium are poised to benefit from China’s move to ease its currency peg to the dollar as the nation’s rising auto sales drive growing demand for the precious metals, UBS AG said. The People’s Bank of China indicated on June 19 it’s abandoning the 6.83-yuan peg to the dollar adopted during the global crisis to shield exporters. The metals used in auto catalysts “stand to benefit from becoming cheaper in local terms,” Edel Tully, a London-based analyst at UBS, wrote in a report. “China is an important consumer of palladium in particular for auto production, so yuan appreciation should boost demand.” Platinum for immediate delivery climbed 0.2 percent to $1,591.45 an ounce, while palladium for immediate delivery declined 0.2 percent at $491.80 an ounce after rising as much as 0.7 percent earlier. Silver may surge to as much as $23 an ounce next year, the highest price since 1980, as investors seek a cheap alternative to gold and a global economic recovery boosts industrial demand, Commerzbank AG said in a report yesterday. Silver for immediate delivery, which rose to the highest price in more than a month of $19.4675 yesterday, increased 0.4 percent to $18.8075 an ounce. The metal may advance to as much as $21 an ounce by the end of this year, about 12 percent higher than yesterday’s close, Eugen Weinberg wrote in the report, dubbing the metal “gold’s little brother.” Compared with gold, silver can be considered low priced, he said. For Related News and Information: Top commodity stories: CTOP Top metals stories: METT

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