Gold surged to a record above $1,920 an ounce on speculation that Europe’s debt crisis will worsen, damping economic growth and driving investors to protect their wealth. Futures in India and China, the world’s two largest consumers, touched all-time highs.
Gold fell for a third day, extending its biggest drop since February 2010, after CME Group Inc. raised futures margins for a second time this month, prompting some investors to sell the metal after a rally to a record high.
Gold advanced to an all-time high above $1,910 as investors sought to protect their wealth against financial turmoil amid speculation that the global economy is slowing. Platinum gained to the highest in more than three years.
CME Group Inc., the world’s largest futures market, raised the margins on gold contracts by 22 percent after prices surged to a record on increased haven demand amid a deepening rout in global equities.
Commodities increased for a second day as the Chinese currency strengthened beyond 6.4 per dollar for the first time in 17 years, raising the purchasing power of the world’s top consumer of energy and industrial metals.
Spot gold climbed, rebounding from the biggest monthly drop since 2009, on speculation that rising food and oil prices will increase the metal’s appeal as a hedge against inflation. Protests in Egypt also boosted haven demand.