Gold prices increased as European banks' debt crisis highlighted Spain and Portugal as the next in line to accept bailouts, Bloomberg reports.
The precious metal struck its highest level in more than two weeks in New York. It also rose for the third straight day as European nations in addition to Greece and Ireland were anticipated to seek aid, sending jittery investors to the stronghold offered by gold. In London, gold bullion increased to $1391.50 on Wednesday morning from $1,383.50 per troy ounce Tuesday afternoon.
There are "too many complications in the euro zone and the U.S.," Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, told Bloomberg. "People are long gold and probably will keep their long positions into the New Year."
European Central Bank officials are scheduled to meet on Thursday to strategize about how to prevent debt woes from widening in Europe, which also is influencing the price of gold and the value of the dollar.
"Increasing uncertainty regarding the role of the U.S. dollar within the international monetary system, concerns related to the stability of peripheral euro zone countries and growing inflationary pressures in Asian emerging markets, particularly China" are boosting the value of gold, according to Tuesday's report by BNP Paribas analyst Anne-Laure Tremblay.