Gold Rises Most in Two Weeks on Haven Demand

Gold jumped more than two weeks to demand for a haven in the midst of the crisis in Europe of sovereign debt and rising tensions between North and South Korea.

The euro headed for the biggest drop since August against the dollar in the credit markets focused on the deficit in Spain and Portugal, after Ireland requested a rescue package. North Korea fired artillery shells near the border of South Korea in the deadliest attack in at least eight months. Gold has gained 26 percent this year, reaching a record $ 1424.30 an ounce on November 09.

"People are shedding risk and go to the assets of flight to quality like gold," said Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago. "People are brutally sell the euro on fears of contagion and the Korean conflict."

Gold futures for December delivery rose $ 19.80, or 1.5 percent, to settle at $ 1377.60 at 1:57 pm in New York Comex, the biggest gain for a most-active contract since Nov. 4. The metal advanced 0.4 percent yesterday after declining 3.2 percent in the previous two weeks.

"People are putting money in metals in a wave of reinvestment," said Frank McGhee, the main distributor Integrated Brokerage Services in Chicago.

German Chancellor Angela Merkel said the prospect of the European series of bailouts was "exceptionally grave" as officers estimated cost savings of € 85000000000 Spain (114 billion).

Gold priced in euros rose to a record in June, after a Greek rescue. Global equities tumbled today.

"Political Risk"

"Political risk is generally a positive for gold," said Edel Tully, an analyst at UBS AG in London.

Silver futures for December delivery rose 11.1 cents, or 0.4 percent, to $ 27,572 an ounce. The metal has risen 64 percent this year.

Palladium futures for December delivery gained $ 6.40, or 0.9 percent, to $ 691.10 an ounce on the New York Mercantile Exchange. The price has risen 69 percent this year.

Platinum futures for January delivery rose $ 2.20, or 0.1 percent, to $ 1657.70 an ounce. The metal has gained 13 percent this year.