Gold and silver rose in London on speculation Portugal will need a bailout similar to those in Greece and Ireland, boosting demand for haven investments such as precious metals. Portugal’s existing 10-year debt has yielded more than 7 percent in 10 of the past 62 days. The country is planning a 10- year sale tomorrow, the first bond auction by any of the euro region’s most-indebted countries this year. Greece needed to be rescued within 17 days of its 10-year debt breaching 7 percent, and Ireland lasted less than a month after reaching that level. “The market is very concerned about the way Europe is evolving financially,” said Bernard Sin, head of currency and metal trading at bullion refiner MKS Finance SA in Geneva. “Can the European Central Bank simply bail out one after another, which translates into people seeking safe-haven refuge, especially in gold and silver.” Spot bullion rose $3.50, or 0.3 percent, to $1,379.18 an ounce at 9:38 a.m. London time. The price rose by the most in a week yesterday on concern that Europe’s sovereign-debt crisis may worsen. The February-delivery contract climbed $5, or 0.4 percent, to $1,379.10 an ounce on the Comex in New York. Spot gold, which has rallied for 10 straight years, climbed to a record $1,431.25 an ounce on Dec. 7 and reached an all-time high priced in euros last month. Immediate-delivery silver gained 11.12 cents, or 0.4 percent, to $29.2062 an ounce. The price has gained 57 percent in the past year. Silver futures for March delivery rose 1.3 percent to $29.225 an ounce in New York. Insurance Record The cost of insuring European sovereign debt against default increased to a record yesterday before a bond sale by Portugal tomorrow and one from Spain the next day. Gold gained 30 percent last year as bailouts of Greece and Ireland sent the euro down 6.5 percent against the dollar. “Concerns about the U.S. economic recovery as well as Europe’s problems are helping gold hold on to gains,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “Bullion will probably be able to rise further.” Japan’s Finance Minister Yoshihiko Noda said today that his government plans to buy bonds issued by Europe’s financial-aid funds, joining China in assisting the region. “It’s appropriate for Japan to make a contribution,” Noda said. “Any uncertainty over the strength of U.S. economy and/or heightened concerns over Europe’s fiscal situation are likely to be supportive for” gold and silver, Leon Westgate, an analyst at Standard Bank Plc in London, wrote in a report. Palladium for immediate delivery advanced 1.3 percent to $762.72 an ounce. Futures for March delivery rose 1.7 percent to $762.50 an ounce. Cash platinum was little changed at $1,740.25 an ounce. Both metals are used in pollution-control devices as well as jewelry. China’s vehicle sales jumped 32 percent to 18.06 million in 2010, the China Association of Automobile Manufacturers said yesterday. To contact the reporters on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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