Gold today rose to near a three-week high on speculation investors will seek a protection of wealth as the US faces a so-called fiscal cliff.

Gold rose 0.2 per cent to $1,734.75 an ounce, near to its highest level since October 19 and silver added 0.1 per cent to $32.64 an ounce.

The US risks entering a recession that will hurt economic growth worldwide should Congress allow more than $600 billion of tax increases and spending cuts to take effect next year, Fitch Ratings said.

The euro approached a two-month low against the dollar as European policymakers prepared to meet to seek a plan to maintain Greek solvency and keep the nation in the common currency.

Holdings in gold-backed exchange-traded products fell 1.5 metric tonnes from a record 2,596.1 tonnes on Friday.

Gold prices and ETPs rose this year as central banks from the US to Europe and Asia took steps to bolster economies hurt by Europe’s debt crisis.

(This article was published on November 12, 2012)
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