Gold gained for a second day in New York as speculation Europe’s debt woes will worsen boosted demand for the metal as a protection of wealth.

The dollar climbed to a 10-week high against the euro on speculation Ireland’s banking crisis will spread. Investor concern has shifted to Spain and Portugal since Nov. 28, when European governments sought to bolster the euro by giving Ireland an 85 billion-euro ($111 billion) bailout package. Gold, which typically moves inversely to the dollar, headed for a fourth monthly gain and rose to a record priced in euros.

“Safe-haven demand from geopolitical and sovereign-debt concerns may continue in the near term,” Tom Pawlicki, an analyst at MF Global Holdings Ltd. in Chicago, said in a report.

Gold futures for February delivery added $5.20, or 0.4 percent, to $1,372.70 an ounce at 8 a.m. on the Comex in New York. Prices are up 1.1 percent this month and reached a record $1,424.30 on Nov. 9. The metal for immediate delivery in London was 0.4 percent higher at $1,371.30.

Bullion rose to $1,375 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,357 at yesterday’s afternoon fixing. Bullion advanced to a record 1,058.733 euros an ounce today, data compiled by Bloomberg show.

“Portugal needs to assure strong fiscal consolidation continuing in 2012 and beyond,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said yesterday. If growth proved to be “somewhat lower” than expected, “then it’s essential still to meet fiscal targets by taking additional measures,” he said.

Security Concerns

There’s “speculation Spain and Portugal could be next to ask for aid, prompting increased safe-haven flows into gold,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., wrote in a report today.

Investors should continue to hold gold as a hedge against currency debasement and long-term inflation, Societe Generale SA said in a report.

North Korea confirmed it has a uranium-enrichment facility with thousands of centrifuges, further fueling security concerns after its deadly attack on a South Korean island on Nov. 23. The plant is to provide fuel for a light-water reactor for the “peaceful purpose of meeting electricity demand,” the official Korean Central News Agency said today.

The International Monetary Fund yesterday said it sold 19.5 metric tons of gold in October. The IMF, which last year said it will sell 403.3 tons as part of a plan to shore up its finances and lend at reduced rates to low-income countries, has sold a combined 222 tons to India, Sri Lanka, Mauritius and Bangladesh. Cumulative “on-market” sales at the end of October were 148.6 tons, it said.

Gold Assets

Gold assets in exchange-traded products rose 3.69 tons to 2,086.87 tons yesterday, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. Silver holdings gained 14.3 tons to 14,784.6 tons, data from four providers show.

Silver for March delivery in New York fell 0.5 percent to $27.07 an ounce, still heading for a fourth monthly advance. It reached a 30-year high of $29.34 on Nov. 9 and is up 61 percent this year. UBS AG lowered its one-month forecast for the metal to $25.50, from $30, the bank said today in a report.

Palladium for March delivery lost 0.3 percent to $693 an ounce. Prices are up 7.4 percent in November, set for a fifth monthly increase. Platinum for January delivery was little changed at $1,646 an ounce, poised for the first monthly decline since August.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Source: http://www.bloomberg.com/news/2010-11-30/gold-gains-on-speculation-european-debt-crisis-may-spread-beyond-ireland.html