Oct. 21 (Bloomberg) -- Gold rose the most in more than a week as a drop in the dollar and renewed optimism that Europe will act to tame the debt crisis boosted investor demand.
The greenback slumped as much as 0.9 percent against a basket of six major currencies, declining for the fourth straight day. European leaders meet this weekend in Brussels as they seek to contain the region’s fiscal crisis. Gold has dropped 11 percent since the end of August as escalating debt woes threatened global growth and commodity demand.
“The weaker dollar and physical buying is supporting gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “People want to know what Europe plans to do to stem the crisis.”
Gold futures for December delivery gained 1.4 percent to settle at $1,636.10 an ounce at 1:46 p.m. on the Comex in New York, the biggest advance since Oct. 10. Still, the metal dropped 2.8 percent this week, the first weekly loss in three.
Bullion slipped to $1,604.70 yesterday, the lowest since Oct. 5.
“The price drop definitively offers an attractive buying opportunity,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “Gold is still seen as a safe haven or a store of value, at least in the mid to long term.”
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal has advanced 15 percent this year.
Silver futures for December delivery rose 3 percent to $31.193 an ounce, the biggest gain since Oct. 10. The metal has gained 3.7 percent this month.
On the New York Mercantile Exchange, platinum futures for January delivery advanced 1.3 percent to $1,509.20 an ounce, rising for the first time this week. Palladium futures for December delivery jumped 5.8 percent to $618.25 an ounce, the biggest gain since Nov. 18.
--With assistance from Glenys Sim in Singapore. Editors: Millie Munshi, Steve Stroth
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