Gold, trading little changed near a one-week high, may decline after a government bond sale in Portugal eased concerns that the European debt crisis may widen, reducing demand for a haven investment. Palladium for immediate delivery touched the highest level since March 2001. Spot gold was at $1,386.72 an ounce at 2:11 p.m. in Singapore after gaining for three days to $1,389.03 yesterday, the highest price since Jan. 4. Portuguese Prime Minister Jose Socrates said yesterday the country didn’t need external help and the bond sale was a “success.” “Gold may be just drifting back down because risk aversion is no longer of such concern,” David Lennox, a Sydney-based resource analyst at Fat Prophets, said today. Still, a decline in the U.S. currency and potential for further European problems may underpin the metal’s price, he said. Portugal sold 599 million euros ($786 million) of bonds due in 2020 at a yield of 6.716 percent, the Portuguese debt- management agency said. That compares with 6.806 percent at the previous auction on Nov. 10. Spain’s first bond auction of 2011, is to be held today. Gold for February on the Comex was also little changed at $1,386.30 an ounce. The futures rose as much as 0.3 percent to $1,389 an ounce yesterday. Spot gold, which gained for a 10th year in 2010, climbed to a record $1,431.25 an ounce on Dec. 7. The dollar rose 0.2 percent against a basket of six currencies after slumping 1 percent yesterday. The euro fetched $1.3098 at 3:03 p.m. in Tokyo from $1.3131 yesterday, when it reached $1.3145, the highest level since Jan. 6. U.S. Economy Gold may continue to gain support from an uneven economic recovery in the U.S. as unemployment remained “stubbornly high” and the dollar was susceptible to setbacks, Lennox said. “Even though we have seen a recovery happening, we are still seeing significant headwinds buffet the currency,” he said. Bullion typically moves inversely to the dollar. Palladium for immediate delivery gained as much as 0.8 percent to $817.25 an ounce, the highest level since March 2001, before trading little changed at $810.60. Cash platinum fell 0.3 percent to $1,796.38 an ounce. The two metals are used in pollution-control devices as well as jewelry. Immediate-delivery silver fell 0.3 percent to $29.58 an ounce. To contact the reporter on this story: Wendy Pugh in Melbourne at wpugh@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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