June 16 (Bloomberg) -- Gold rose for the third straight day as volatility in the currency markets boosted demand for the precious metal as an alternative investment.
The euro fell to a three-week low against the dollar on speculation that Greece’s sovereign-debt crisis will worsen as talks over another aid package stalled. The greenback has dropped 12 percent in the past year against a basket of major currencies. Gold priced in British pounds rose to a record today.
“Gold is now a currency,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “Gold is strong and growing stronger.”
On the Comex in New York, gold futures for August delivery rose $3.70, or 0.2 percent, to settle at $1,529.90 an ounce at 1:46 p.m.. The price gained 0.7 percent in the previous two sessions. The metal has advanced 24 percent in the past 12 months.
Implied volatility for one-week Eurodollar options surged to the highest since November. The measure signals the expected pace of swings in the underlying currency.
Gold rose to a record $1,577.40 on May 2 as escalating sovereign-debt woes and record-low U.S. borrowing costs increased the appeal of the metal as an alternative to currencies. The price denominated in euros reached an all-time high on May 25.
‘Roll the Dice’
“Investors don’t want to roll the dice on being caught in one particular currency or the other,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. “There is gravitation toward the gold market to diversify away from paper currencies.”
Silver futures for July delivery rose 14.9 cents, or 0.4 percent, to $35.559 an ounce on the Comex. The price has jumped 93 percent in the past year.
Platinum futures for July delivery fell $13.50, or 0.8 percent, to $1,760.70 an ounce on the New York Mercantile Exchange. The metal dropped for the fifth straight session, the longest slump since December. The price has gained 12 percent in the past year.
Palladium futures for September delivery fell $12.50, or 1.6 percent, to $763.50 an ounce. The metal declined for the fifth straight session, the longest slide since March. The price has gained 61 percent in the past year.
--Editors: Patrick McKiernan, Daniel Enoch
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