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Gold gained for a second day in New York as concern Europe's sovereign-debt crisis is worsening spurs demand for the metal as a protection of wealth, Bloomberg reported.

It said the euro reached a four-month low versus the dollar after Fitch Ratings downgraded Greece's long-term credit rating, citing heightened risk that the nation may not be able to sustain membership in the monetary union. Bullion jumped 2.5% yesterday, the most since October, as a U.S. report showed manufacturing in the Philadelphia region unexpectedly shrank in May for the first time in eight months.

Gold for June delivery gained 1% to US$1,590.70 an ounce by 7.58 a.m. on the Comex in New York. Prices are up 0.4% this week. Bullion for immediate delivery was 1.1% higher at US$1,591.70 in London

Gold is up 1.5% this year after 11 consecutive annual increases. It slumped the previous two weeks as a stronger dollar cut demand for the metal as an alternative asset. Holdings in bullion-backed exchange-traded products rose 3.3 metric tons to 2,381.8 tons yesterday, about 1.2% below the March 13 record, data compiled by Bloomberg show.

Gold reached the lowest price this year on May 16 as Greece's inconclusive May 6 election sparked political turmoil and reignited concern the country will renege on pledges to cut spending as required by the two separate rescue packages. In Spain, the cost of insuring against a default jumped to a record. Moody's Investors Service lowered the credit ratings of 16 Spanish banks yesterday.

Silver for July delivery rose 1.4% to US$28.405 an ounce. Palladium for June delivery was little changed at US$605.15 an ounce. Platinum for July delivery gained 0.5% to US$1,460.80 an ounce.

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