Gold starts the week higher on worries over Italy

Gold started the week higher as uncertainty continued over in Europe. Gold rose another 2% and settled just below the $1,800/oz level. As the financial crisis grows in Europe, political instability continued in Greece also helping the metal today.

By CHRISTOPHER LEONARD, AP Business Writer
November 7, 2011
Google News

Gold is started the week higher Monday as uncertainty deepened over Europe's financial crisis.

Gold for December delivery rose $35, or 2 percent, to settle at $1,791.10 per ounce.

The price of gold often rises during times of financial uncertainty. Investors see the precious metal as a safe store of value and tend to turn to it instead of currencies or stocks when they're fearful. On Monday, doubts about Europe were stoked again as financial officials gathered in Brussels for urgent talks on how to ease the continent's debt crisis.

At the same time, political instability continued to roil Greece. The two main parties in that country were still trying to form an interim government that could impose austerity measures needed to avoid default.

Copper prices fell on pessimism about the economy and the housing market. Copper is used as a raw material in everything from electronics to new housing construction, so its price is closely tied with economic growth.

Fitch Ratings released a report that U.S. foreclosure rates have almost doubled from this time last year. Fitch said U.S. housing prices will probably fall another 10 percent before stabilizing. If that happens, it could hinder the construction industry and depress demand for copper.

Copper for December delivery fell 2.9 cents, or nearly 1 percent, to close at $3.5355 per pound.

Other metals were higher. December silver rose 7.44 cents, or 2 percent, to close at $34.828 an ounce. December palladium rose $6.60, or 1 percent, to close at $661.90 an ounce. January platinum gained $28.70 to finish at $1,658 an ounce.

Crop prices were down, with the exception of wheat. December wheat gained 2 cents to finish at $6.3875 per bushel. December corn fell 2.5 cents to end at $6.5325 per bushel. November soybeans lost 19.25 cents to finish at $12.0175 a bushel.

Benchmark crude oil gained $1.26, or more than 1 percent, to end at $95.52 per barrel on the New York Mercantile Exchange.

Heating oil rose 4.91 cents to finish at $3.1198 per gallon, gasoline futures rose 6.48 cents to close at $2.7282 per gallon and natural gas lost 8.9 cents to close at $3.803 per 1,000 cubic feet.

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