Gold Surges to Record on Haven Demand

Gold futures hit another record high as lawmakers failed to reach an agreement on the raising of the US debt limit. It is possible for the nation to reach a default as early as August 2nd if an agreement is not made.

By Pham-Duy Nguyen and Nicholas Larkin
Jul 25, 2011 7:42 AM MT
BLOOMBERG

Gold futures climbed to a record $1,624.30 an ounce as U.S. lawmakers failed to reach an agreement on raising the federal debt limit, boosting demand for the metal as a haven investment.

U.S. House Speaker John Boehner plans to press ahead with a two-step debt-limit extension that President Barack Obama has threatened to veto, fueling concern the nation is lurching toward a default as early as Aug. 2. Greece’s credit rating was cut three notches by Moody’s Investors Service. Europe’s debt woes drove gold to all-time highs in euros and pounds last week.

“Gold is feeding off the uncertainty of the debt negotiations,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “Gold is in a ‘can’t lose’ situation with the debt negotiations because regardless of the outcome, the dollar is going to suffer.”

Gold futures for August delivery rose $14.20, or 0.9 percent, to $1,615.70 at 10:40 a.m. on the Comex in New York. The previous record was on July 19.

Republicans and Democrats prepared competing plans for raising the U.S. debt ceiling. Mohamed A. El-Erian, whose Pacific Investment Management Co. runs the world’s biggest bond fund, said the U.S. may lose its AAA debt rating even if lawmakers avoid a default.

Before today, gold rose 13 percent this year, heading for the 11th straight annual gain. Investors boosted holdings in exchange-traded products backed by the metal to a record 2,122.6 metric tons on July 20.

Silver futures for September delivery rose 40.3 cents, or 1 percent, to $40.525 an ounce on the Comex.

Palladium futures for September delivery fell $1, or 0.1 percent, to $805.40 an ounce on the New York Mercantile Exchange. Platinum futures for October delivery dropped 60 cents to $1,797.80 an ounce.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

To see original article CLICK HERE

Follow Us

Share Page

Login

Get access to the latest trading information, tools to help your investing, and much more!

Login   Sign Up

Search

Weekly Charts

Current Spot Prices

Gold$1309.05
Silver$21.00
Platinum$1485.00

Special Offers

 
 
© 2012 Swiss America Trading Corp. All Rights Reserved.   |   Privacy Policy   |   Site Map   |   Contact Us   |   Mobile Version
SWISS AMERICA and Logo are trademarks of Swiss America Trading Corp.
Where did you hear about us?
Roger HedgecockRay Lucia
Pat BooneMichael Savage
Bill CunninghamOther
×