Gold advanced in Asian trade for a second day as demand was sustained for the metal as a protector of wealth. Immediate-delivery gold added as much as 0.6 percent to $1,402.32 an ounce and traded at $1,401.85 at 10:47 a.m. in Singapore. The price climbed to a record $1,431.25 on Dec. 7. Holdings in exchange-traded funds expanded 95,839 ounces to 67.4 million ounces yesterday. “Investment demand for the metal is definitely there,” said Wallace Ng, executive director at ABN Amro Bank NV in Hong Kong, said today by phone. Gold has gained more than 28 percent this year, heading for a 10th straight annual advance, as investors lost confidence in currencies and bought precious metals as a store of value. Demand escalated after U.S. policy makers increased asset purchases to bolster economic growth. Futures for February delivery gained 0.3 percent to $1,402.70 on the Comex in New York. Precious metals will continue to rally next year because of low interest rates, Goldman Sachs Group Inc. said in a report yesterday, predicting gold will reach $1,690 an ounce in 12 months. That would be a 21 percent gain from the current level. “We expect a low U.S. real interest rate environment will continue in 2011, particularly given the resumption of quantitative easing measures in the U.S., and expect gold prices to continue to climb” into next year, Goldman analysts said in the report. Gold will peak in 2012, they said. Silver increased 0.7 percent to $29.7175 an ounce. Palladium for immediate delivery advanced 0.5 percent to $761 an ounce, reversing an earlier decline. The price has jumped 87 percent this year, the best among the four major precious metals. Immediate-delivery platinum rose 0.5 percent to $1,707.75 an ounce. “Recovering global automobile demand will likely continue to put upward pressure on autocatalyst demand and therefore on platinum and palladium prices,” Goldman analysts said. To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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