London 27/07/2011 - Gold prices were hovering just below an earlier fresh all-time high in European trading on Wednesday on positive momentum from continued concerns over sovereign debt problems.
Spot gold gained $6.20 to a fresh all-time high of $1,625.50 at one stage overnight and was last at $1,624.20/1,625.00 per ounce, still up $4.90. The yellow metal also set new all-time highs in Indian rupee terms at 72,184 per ounce.
On the charts, next resistance is pegged at $1,625 and then $1,630, while support stands at $1,607.
Gold’s upward momentum was also attributed to the monthly expiry of options contracts on Comex on July 26
A vote on raising the debt ceiling and a deficit cuts plan in the US House of Representatives has been rescheduled from today, propelling gold above $1,625, broker Fairfax said.
“The political stalemate in Washington over US debt looks set to continue for a while longer,” a trader said. “If investor confidence in US government bonds wanes, the resulting downward pressure on the dollar should be bullish for gold.”
The stand-off between US lawmakers over the lifting of the country’s $14.3 trillion debt ceiling - less than week remains before the August 2 deadline, after which the country will run out of money to pay its bills - has taken its toll on the dollar.
The US currency fell to a new low against the euro since June 5 at 1.4535 before clawing back some ground - it was last around parity at 1.4488.
On the data front, US durable goods numbers are the only notable releases due for today.
On the supply side, gold also profited from the threat of lower supply out of South Africa, where a strike by unionised workers in the industry will take place tomorrow, with more than 250,000 miners set to down tools. South Africa is the world’s fourth-largest gold producer.
Among other precious metals, palladium extended yesterday’s 4.6-percent gain to a fresh five-month high of $844.50 at one stage before settling at $835/840 per ounce, down just $1.
The metal benefitted from rekindled investor appetite, strong technical signals and persistent supply concerns in South Africa.
“It is highly likely that platinum miners in South Africa will also down tools - platinum and palladium are generally mined together - so the price of these two has also been given a boost,” broker Commerzbank said.
Platinum also reached its highest since June 13 at $1,816 overnight and was recently quoted at $1,803/1,813 per ounce, down $4.50.
First-half refined platinum production at Anglo Platinum, the world’s largest platinum supplier, rose 17 percent to 1.174 million ounces from last year, while palladium output climbed 22 percent to 662,000 ounces.
Elsewhere, silver rose one percent to its highest since May 4 at $41.21 at one point - it settled at $40.92/40.99 per ounce, still up 11 cents.
