The most actively traded contract, for August delivery, rose $US4.80, or 0.4 per cent, to settle at $US1245.60 an ounce on the Comex division of the New York Mercantile Exchange.
Gold, often seen as a refuge investment in times of economic or political uncertainty, has had a tailwind in recent weeks as fears about global economic health have mounted, driven by the European debt crisis.
“It’s kind of like a warm blanket on a cold day,” said Dan Cook, Chicago-based senior market analyst with brokerage firm IG Markets, which has its headquarters in London.
KEY COMMODITY PRICES: oil, base metals, gold, silver, livestock and wheat
Market worries have focused on the fiscal health of Greece, Spain and Portugal and have recently spread beyond the euro zone to Hungary.
The latest jolt came last night, when European markets weakened after a strong warning from Fitch Ratings over Britain’s finances. The agency said Britain’s fiscal challenges warrant a faster pace of deficit reduction than was outlined in the April 2010 budget.
This boosted gold, which some see as holding its value better than currencies or equities over the longer term.
“The flight to safety is alive and well,” said Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago. “No one out there thinks the euro-zone debt problems are resolved.”
Gold’s gains today continue a sharp bounce that started last week and accelerated in the previous session when the metal came close to breaching its record from mid-May, helped by record prices in euro-denominated gold.
Euro-priced gold marched to another record fix at €1042.94 amid the worries about the common currency, indicating that participants aren’t only using US dollar-denominated gold as a currency hedge.
The higher gold prices today spurred buying in other precious metals traded in New York.
Comex July silver gained US31.5 cents, or 1.7 per cent, to settle at $US18.477 an ounce. Nymex July platinum rose $US11.50, or 0.8 per cent, to $US1528.80 an ounce while September palladium added $US11.80, or 2.7 per cent, to $US442.15 an ounce…read more at The Australian
