Forexpros – Gold futures extended gains on Monday, trading close to the highest level in ten weeks as mounting fears that the euro zone’s sovereign debt crisis could spread to Italy boosted the safe haven appeal of the precious metal. On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,555.45 a troy ounce during U.S. morning trade, climbing 0.7%. It earlier rose as much as 0.8% to trade at USD1,557.35 a troy ounce, the highest price since June 22. Gold prices were less than 1.3% away from an all-time high of USD1,577.15 an ounce it hit on May 2. In the euro zone, senior policymakers, including European Central Bank President Jean-Claude Trichet and EU economy commissioner Olli Rehn were holding an emergency meeting to assess the risk of the debt crisis spreading from Greece to Italy. The cost of insuring Italian government debt against default rose to a euro lifetime high earlier, while Italian bond yield spreads over German Bunds soared to record levels. Italy is the euro zone's third largest economy and has the highest sovereign debt ratio relative to its economy in the single currency bloc after Greece. Meanwhile, speculation that officials could accept a selective Greek default continued, following a report in the Financial Times on Sunday. Euro-denominated gold and gold priced in sterling both surged to record highs of EUR1,108.75 and GBP969.95 a troy ounce respectively. Gold prices also benefitted from data showing that Chinese consumer prices rose to a three-year high of 6.4% in June, despite ongoing efforts by Beijing to cool prices. Investors often buy gold and silver as refuges against economic and political uncertainty and as hedges against inflation. Elsewhere, silver for September delivery slipped 0.55% to trade at USD36.52 a troy ounce, while copper for September delivery fell 0.58% to trade at USD4.380 a pound.

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