Gold rose in London as political tensions between South Korea and North Korea drove investors to precious metals as a haven. Silver also climbed. South Korea said a live-fire drill that drew threats of retaliation from North Korea ended without incident. Some investors buy gold in times of global tensions. Gold assets in exchange-traded products, or ETPs, rose 0.7 percent to a record 2,113.2 metric tons as of Dec. 17, according to data collected by Bloomberg from 10 providers. Gold prices have jumped 26 percent this year as ETP holdings climbed almost 18 percent. “Heightened military tensions between North and South Korea kept gold modestly bid overnight,” said Edel Tully, a London-based analyst at UBS AG, in a report today. Immediate-delivery bullion gained $5.98, or 0.4 percent to $1,381.43 an ounce at 10:46 a.m. London time. The February- delivery contract rose $4.20, or 0.3 percent, to $1,383.40 an ounce on the Comex in New York. The metal is set for a 10th annual gain, as a sovereign-debt crisis in Europe and so-called quantitative easing in the U.S. hurt currencies and aided demand. The price reached a record $1,431.25 an ounce on Dec. 7. Hedge-fund managers and other large speculators cut their net-long position in New York futures to 220,195 contracts in the week to Dec. 14, according to U.S. Commodity Futures Trading Commission data. That’s the lowest level since Nov. 16. Baker Steel Capital Managers LLP, a London-based firm managing about $1.7 billion, plans a gold fund that will hold gold and shares of producers, according to Managing Partner David Baker. Silver for immediate delivery climbed 0.2 percent to $29.2075 an ounce. Spot palladium added 0.4 percent to $742.50 and immediate-delivery platinum increased 0.2 percent at $1,702 an ounce. To contact the reporter on this story: Tony C. Dreibus in London at tdreibus@bloombeg.net To contact the editor responsible for this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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