Gold surged to a record and is set for the best run of gains in more than three decades as U.S. politicians failed to reach agreement on raising the debt ceiling and Europe’s sovereign crisis lingered, boosting haven demand. Bullion in euros and pounds also rose to all-time highs. Immediate-delivery gold gained as much as 0.3 percent to $1,598.60 an ounce, rising for an 11th consecutive session, the best run since the 11 days to July 8, 1980, according to Bloomberg data. Spot gold, which has rallied 12 percent this year, traded at $1,597.32 at 2:16 p.m. in Singapore. President Barack Obama is pressing congressional leaders for a multitrillion-dollar agreement in deficit-cutting talks as negotiators near an Aug. 2 deadline for raising the debt limit. Former Treasury Secretary Larry Summers told CNN a default would cause panic in the financial system, making the 2008 failure of Lehman Brothers Holdings Inc. “look like a very small event.” “The situation in the euro area, as well as the proliferation of the debt-ceiling problem in the U.S., continues to be a very strong focus,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. Gold for August delivery in New York also gained to a record, climbing as much as 0.6 percent to $1,599.20 an ounce. The metal jumped to its highest ever levels of 1,136.654 euros and 992.378 pounds. Cash silver rose as much as 1.7 percent to $39.96 an ounce, climbing for a fifth day. European leaders will this week seek to revamp their debt crisis-fighting strategy amid warnings of contagion from the International Monetary Fund. European government chiefs are set to convene for a summit in Brussels on July 21 to discuss the stability of the euro area and Greek financing. ‘Cause of Concern’ (For a related story to the European sovereign-debt crisis, click here. For a story on the U.S. debt talks, click here. To read a story on the performance today of currency and equity markets, click here.) “It’s difficult to see the problems and downside risk to global growth being less of a focus,” Westmore said by phone from Melbourne. “As they continue to be a cause of concern, even if we don’t get to $1,600 today, we’re likely to grind higher to those levels in the coming days.” The IMF last week called for more urgency in fixing Greece’s funding as the crisis threatens “market disorder that would affect funding rates for other vulnerable sovereigns and could have severe implications for financial institutions.” “As long as there’s no explosive development in the Europe debt situation, we see gold tracking a steady ascent to $1,650 before the year is over,” said Duan Shihua, head of corporate services at Haitong Futures Co., China’s largest brokerage by registered capital. $5,000 Target Gold is set for an 11th year of gains, with rises driven by central-bank buying, weaker currencies and increased demand from emerging-market investors. The commodity may rally to $5,000 by 2020 as incomes rise in China and India, the two biggest users, Yan Chen, head of metals and mining at Standard Chartered Equity Research, said on Bloomberg Television’s “On the Move Asia.” Holdings in exchange-traded products backed by gold increased for a seventh day on July 15 to the highest level since December. Bullion held by the products stood at 2,101.86 metric tons, according to data compiled by Bloomberg. “The medium-term outlook is still bullish and there will be many people looking to accumulate” gold in their portfolios, said Duan, who was rated the top gold analyst in a poll by the Futures Daily and Securities Times. Hedge-fund managers and other large speculators increased net-long positions in New York gold futures for the first time in three weeks according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets on gains, beat short positions by 197,597 contracts in the week to July 12. Spot platinum was little changed at $1,760.75 an ounce, while palladium was also little changed at $784.50 an ounce. To contact the reporter on 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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