By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed by as much as $16 an ounce Wednesday, extending sharp gains made the previous day in New York, with global debt troubles back on center stage.
Gold for August delivery GC1Q +0.97% rose $14.70, or 1%, to $1,527.40 an ounce on the Comex division of the New York Mercantile Exchange. It touched a high of $1,529.30 earlier.
Prices for the precious metal jumped more than $30 an ounce in regular trading on Tuesday, buoyed by safe-haven buying as Europe’s debt issues came back onto the agenda.
On Monday, Standard & Poor’s credit-rating agency signaled that a plan to roll over Greek government debt would constitute a “selective default.” Then on Tuesday, Moody’s Investors Services downgraded Portugal’s credit rating by four notches to speculative grade. Read more on Portugal downgrade.
“Risk sentiment across the broader financial landscape soured after rating agency Moody’s cut Portugal’s debt rating to junk, while concerns surrounding U.S. debt levels intensified ahead next month’s deadline for raising the countries $14.3 trillion ceiling,” James Moore, an analyst at TheBullionDesk.com, said in a note to clients Wednesday.
“While U.S. and euro-zone debt looks likely to dominate traders’ views in the coming days, players will also be paying close attentions to key U.S. jobs data scheduled [Thursday] and Friday, in addition to Thursday’s rate meetings by the [European Central Bank] and Bank of England,” he said.
Looking ahead, Julian Jessop at Capital Economics said that the price of gold is likely to be buffeted over the next few months, with worries about the heath of the global economy and sovereign debt supporting the precious metal, but fading inflation fears and a firmer dollar taking away its investment appeal.
Still, he expects upward pressures to win out and sees gold reaching $1,650 an ounce by the end of 2011 and $2,000 in 2012.
In other metals action Wednesday, September silver SI1U +1.14% rose 43.5 cents to $35.84 an ounce, while September copper HG1U -0.56% declined 1.4 cents to $4.33 per pound.
September palladium PA1U +0.19% traded at $777.40 an ounce, up $1.75, while October platinum PL1V -0.03% fell by $1.90 to $1,740.20 an ounce.
