Copper gains as strike in Chilean mine continues
By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures returned to record territory Tuesday, crawling higher as U.S. lawmakers remain stuck over how to pursue a deal to raise the country’s debt ceiling.
Gold for August delivery GC1Q +0.17% , the contract with the most volume, added $1.60, or 0.1%, to trade at $1,613.70 an ounce on the Comex division of the New York Mercantile Exchange.
The December contract GC1Z +0.19% , which has the most open interest, added $1.80 to $1,616.20 an ounce.
August gold settled at a record $1,612.20 an ounce on Monday, after a weekend of talks produced no deal on the U.S. debt limit and deficit reduction.
Late Monday, President Barack Obama and House Speaker John Boehner touted vastly different debt-ceiling plans. The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk to begin defaulting on its obligations.
News of an agreement in the coming days would likely “trigger an immediate correction in bullion prices,” analysts at HSBC said in a note to clients late Monday. The type of agreement reached, however, would matter.
A long-term, specific agreement addressing debt reduction would likely result in a bounce for the dollar and “some unwinding of the recent gains in ‘risk off,’ ” the analysts said.
Conversely, a shorter-term deal would result in a less-pronounced, shorter correction, they added.
Silver turned higher alongside gold, with the September contract SI1U +0.43% up 17 cents, or 0.4%, at $40.54 an ounce.
Copper held the line on earlier gains as miners at the world’s largest copper mine, in Chile, continued to stay out on strike.
Workers at the Escondida mine, controlled by BHP Billiton Ltd. BHP +0.67% , sought government mediation with talks scheduled for Tuesday, according to news reports.
September copper HG1U +1.66% added 7 cents, or 1.5%, to $4.47 a pound.
