Gold Bullion Market, Futures Gold Prices per Ounce

Bullion gold is in the 11th year of a bull market and futures gold prices reached a record $1,923.70 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 26 percent this year. Gold may gain for a second day in New York as concerns about Europe?s debt crisis spur demand for the metal as a protection of wealth.

Italian Prime Minister Silvio Berlusconi faces a budget vote amid pressure to quit and a surge in borrowing costs, stoking concern the region?s debt crisis is spreading. Gold yesterday reached the highest level in more than six weeks and holdings in exchange-traded products backed by bullion rose by the most since August.

?Italy is set to dominate the headlines this week, with gold likely holding up amid ongoing uncertainty,? Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. ?We doubt the euro?s credibility could be restored overnight, but even given an immediate improvement to risk, it is doubtful bullion would take heavy sustained losses.?

Gold for December delivery rose $1.40, or 0.1 percent, to $1,792.50 an ounce by 8:01 a.m. on the Comex in New York. Prices reached $1,799.90 yesterday, the highest since Sept. 21. Immediate-delivery gold was 0.2 percent lower at $1,791.25 in London.

Berlusconi must show today that he has enough support in parliament to stay in power and implement austerity measures to trim the region?s second-biggest debt and bring down borrowing costs. The yield on 10-year Italian bonds climbed to a euro-era record today.

?Fundamentals are stronger than before with Italy on the brink of default and the EU crisis more complicated than before,? Pradeep Unni, an analyst at Richcomm Global Services in Dubai, said in a report to investors. ?Retracements and corrections are possible as we climb above $1,800, but stay invested.?

Gold-backed ETP holdings gained 13.3 metric tons yesterday, the most since Aug. 18, to 2,297.9 tons, data compiled by Bloomberg show. That?s the highest level since Aug. 23.