July 13 (Bloomberg) -- Gold rose the most in a month on speculation that a global recovery will boost demand for precious and industrial metals.

U.S. equities railed for the sixth day after Alcoa Inc., the largest U.S. aluminum producer, reported earnings that topped analysts’ estimates. The Reuters/CRB Index of 19 commodities rose as much as 1.5 percent. Before today, gold gained 9.4 percent this year.

“Gold is rallying on the heels of positive sentiment,” said Adam Klopfenstein, a senior market strategist at brokerage Lind-Waldock in Chicago. “We see strength in a host of commodities. This is a positive correlation with equities.”

Gold futures for August delivery rose $18, or 1.5 percent, to $1,216.70 an ounce at 11:46 a.m. on the Comex in New York. A close at that price would mark the biggest gain for a most- active contract since June 7. Yesterday, the price settled below $1,200 for the fourth time in five sessions.

“Gold tried repeatedly to break down below $1,200, but the buyers kept coming back,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “This is a short-covering rally.”

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, grew for the first time since June 29. The fund added 0.3 metric ton to 1,314.82 tons yesterday, according to the company’s website. Global ETF holdings rose 2.7 tons to a record 2,075.11 tons yesterday, according to Bloomberg data from 10 providers.

Portugal Debt Downgrade

Gold also rallied after Portugal’s debt rating was cut two levels to A1 by Moody’s Investors Service, which cited the country’s growing debt burden and weak economic prospects. Gold reached a record $1,266.50 an ounce on June 21 and all-time highs in euros, British sterling and Swiss francs last month amid Europe’s credit crisis.

“The downgrade is a signal to the market that the situation is not over,” said Bernard Sin, the head of currency and metal trading at bullion-refiner MKS Finance SA in Geneva. “There is still long-term fear because of uncertainty.”

Silver futures for September delivery jumped 39.8 cents, or 2.2 percent, to $18.315 an ounce on the Comex.

Platinum futures for October delivery gained $19, or 1.3 percent, to $1,534.30 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery surged $15.35, or 3.4 percent, to $469.50 an ounce, also on the Nymex.

--With assistance from Nicholas Larkin in London. Editors: Michael Arndt, Steve Stroth.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net;

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Source: http://www.businessweek.com/news/2010-07-13/gold-gains-most-in-a-month-on-increasing-demand-for-commodities.html