Gold rose for a second straight day, capping the first monthly gain since November, on speculation that concern over Greece's debt will increase demand for bullion as an alternative to holding currency.
Greece's credit rating may be lowered within months if it fails to meet the objectives in its plan to reduce a budget deficit, Moody's Investors Service said yesterday. The dollar fell as much as 1 percent against the euro after yesterday climbing to near a nine-month high.
"You've got to look to play gold on the long side," said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. "Fiat currencies continue to lose credibility. Even if Greece gets rescued, there will be another country in line with their hands out. People are flocking to gold to shield themselves from the volatility in the currency markets."
Gold futures for April delivery rose $US10.40, or 0.9 per cent, to $US1118.90 an ounce on the New York Mercantile Exchange's Comex unit. The metal rose 3.2 percent in February.
The euro has fallen against most major currencies this month as concern that Greece will struggle to contain its deficit reduced demand for the 16-nation monetary unit.
