Gold rebounds from four-week low as debt concerns spur demand

LONDON: Gold today rebounded from the lowest level in almost four weeks as debt concerns in the US and Europe spurred demand for the metal as a protection of wealth.

The gold gained USD 17.43, or 1 per cent, to USD 1,694.75 an ounce. Prices yesterday fell to USD 1,667.03, the lowest since October 25. Holdings in gold-backed exchanged traded products climbed 2 tonnes yesterday to an all-time high of 2,341.94 tonnes.

A US Congress budget super-committee failed to reach agreement on reducing the budget deficit and data today may show European consumer confidence sank to a two-year low.

Bullion is in the 11th year of a bull market and prices reached a record USD 1,921.15 an ounce on September 6 as investors sought to diversify away from equities and some currencies amid debt crises and concerns about slowing economic growth.

Standard and Poor's and Moody's Investors Service kept the US' credit rating unchanged after Congress's special debt-reduction committee failed to reach an agreement, setting the stage for USD 1.2 trillion in automatic spending cuts.