Gold climbed after a second weekly loss as the dollar fell against the euro on optimism a deal to rescue Ireland’s banks may curb a spread of the debt crisis. Silver climbed to the highest level in more than a week. Gold for immediate delivery rose 0.7 percent to $1,361.80 an ounce at 2 p.m. Seoul time. Bullion for December delivery gained 0.6 percent to $1,361 an ounce on the Comex in New York. Securities and Exchange Commission filings this month by Soros Fund Management LLC, Paulson & Co. and Touradji Capital Management LP listed investments in gold as their biggest holdings. “The Irish problem is not fixed yet, but the agreement appears to be a relief for the time being, which is boosting the euro,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “The dollar is down on that, helping gold’s gain. I guess bullion might have bottomed out and could head north toward the end of the year.” The euro rose for a fourth day as European Union finance ministers said the deal will create a capital fund for Ireland’s banks and may end up “restructuring” the financial industry. The euro rose to $1.3755 as of 2:02 p.m. in Seoul from $1.3673 in New York on Nov. 19. The dollar also dropped against a basket of six major counterparts including the euro and the yen. Gold typically moves inversely to the dollar. Bullion lost 1.2 percent last week in its second straight drop as moves by China to fight inflation and slow growth eroded demand for precious metals and raw materials. China ordered banks to set aside larger reserves for the second time in two weeks. The country is the biggest bullion consumer after India. Overweight in Gold Investors should stay overweight in silver, palladium and gold over a period of one year, said Societe Generale. Liquidity injection by central banks, dollar weakness and possible risks in the financial markets will give a further boost to precious metals prices, Frederic Lasserre, the bank’s head of commodities research, said today at a media briefing in Singapore. Gold has jumped 24 percent in 2010, heading for the 10th straight annual gain, buoyed by investor demand for an alternative against debasement of currencies as central banks maintained low interest rates and governments spent trillions of dollars to spur growth. Exchange-traded products own 2,088 metric tons, equal to nine years of U.S. mine supply, data compiled by Bloomberg show. Precious metals will produce the best commodity returns in the next year, Goldman Sachs Group Inc. said in a Nov. 9 report. ‘Big Mistake’ “People who are selling gold here are making a big mistake,” said Michael Pento, a senior economist at Euro Pacific Capital Inc. in New York who correctly predicted gold’s highs the past two years. “The gold bull market will end when real interest rates become positive and we’re very far away from that. The Fed believes it’s going to have to print more money to keep real interest rates from rising and rescue the economy.” Silver for immediate delivery rose as much as 1.8 percent to $27.8150 an ounce, the highest level since Nov. 11, and last traded at $27.7075 an ounce. Silver-coin sales will climb as investors seek to protect their wealth from weakening currencies, according to the Perth Mint, producer of about 6 percent of the world’s gold bullion. Platinum for immediate delivery gained 0.7 percent to $1,675 an ounce and spot palladium rose 1.3 percent to $711.25 an ounce. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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