Gold rallied to an all-time high for a second straight day as escalating concern that the global recovery may be losing momentum drove investors to buy the metal to protect their wealth. Immediate-delivery gold surged to $1,671.82 an ounce, surpassing yesterday’s high of $1,661.95, and traded at $1,669.53 at 3:08 p.m. in Singapore. The December-delivery contract in New York gained as much as 1.8 percent to $1,674.60 an ounce, beating yesterday’s peak of $1,664.50. Spot gold has advanced 11 percent in the past month as U.S. lawmakers battled to head off a default by raising the debt ceiling before an Aug. 2 deadline. Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings for the U.S., while warning that the ratings could be downgraded if lawmakers fail to enact debt-reduction measures and the economy weakens. “The U.S. debt problem has been settled for now and problems in Europe have resurfaced, which will keep gold’s uptrend intact,” Hou Shufeng, an analyst at China Merchants Futures Co., said from Shenzhen. The precious metal is headed for an 11th year of gains, driven by increased investment demand and buying by central banks. Holdings in exchange-traded products expanded to 2,173.923 metric tons yesterday, the highest level ever, Bloomberg data show. The assets, which totaled 2,097.231 tons on Dec. 31, have climbed for seven straight sessions. Thailand, South Korea and Kazakhstan added gold valued at about $2.4 billion to their reserves last month, joining Mexico and Russia in increasing holdings this year as central bankers hedge against depreciating foreign-currency reserves. Debt Problems Gold rallied 2.6 percent yesterday, the most in nine months, after a report showed U.S. consumer spending declined in June, raising concern that a slump in jobs-creation is hurting growth. The Labor Department may say on Aug. 5 that U.S. employers added 85,000 jobs in July, compared with 18,000 in June, a Bloomberg News survey showed. “The U.S. economy isn’t doing well and the European debt problem is a long-term problem, which should drive prices to $1,800 by the end of the year,” said Hou. In Europe, ten-year bond yields for Spain and Italy reached euro-era records yesterday on concern that rising debt-servicing costs may wipe out the benefits of austerity measures, prompting Spanish Prime Minister Jose Luis Rodriguez Zapatero to delay a planned vacation. His Italian counterpart, Silvio Berlusconi, is scheduled to give a national televised speech today. Gold advanced to all-time highs of 1,180.226 euros an ounce, 1,027.216 pounds an ounce, 11,426.832 rand and C$1,609.331 an ounce today. Spot gold and gold futures in Shanghai, as well as futures in India, also touched records. Cash silver rose 0.7 percent to $41.0975 an ounce. Spot platinum and palladium were little changed at $1,794 an ounce and $826.25 an ounce, respectively. 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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