http://www.bloomberg.com/news/2011-07-14/gold-rallies-to-record-on-haven-demand-as-debt-concerns-intensify-in-u-s-.htmlGold Rallies to Record on Haven Demand as Debt Concerns Intensify in U.S.
By Glenys Sim - Jul 13, 2011 7:45 PM CT
July 13 (Bloomberg) -- Christin Tuxen, an analyst at Danske Bank A/S, discusses the outlook for gold prices. Tuxen, speaking from Copenhagen with Owen Thomas on Bloomberg Television's "Countdown," also talks about volatility in silver prices and the performance of the U.S. dollar. (Source: Bloomberg)
Gold Investment Strategy, Oil Market Outlook, July 12
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July 12 (Bloomberg) -- Spencer Patton, founder and chief investment officer at Steel Vine Investments LLC, talks about the drivers of gold prices and investment strategy. Patton, speaking with Lisa Murphy on Bloomberg Television's "Fast Forward," also discusses the outlook for the oil market. (Source: Bloomberg)
Gold surged to a record after Moody’s Investors Service placed the U.S. rating on review for a downgrade, U.S. debt-ceiling talks stumbled and Europe’s sovereign crisis persisted, boosting demand for a haven.
Immediate-delivery bullion climbed as much as 0.5 percent to $1,589.80 an ounce, and traded at $1,587.55 at 9:36 a.m. in Singapore. Federal Reserve Chairman Ben S. Bernanke’s comments that that additional stimulus may be needed also drove the metal’s ninth day of gains, the best run since April.
The U.S., rated Aaa since 1917, was put on review for the first time since 1995, on concern the debt threshold will not be raised in time to prevent a missed payment of interest or principal, Moody’s said. President Barack Obama walked out of a meeting with legislative leaders on raising the U.S. debt ceiling, according to House Majority Leader Eric Cantor.
The same “factors that have driven gold up in recent days remain firmly intact, and continue to influence prices,” James Steel, an analyst at HSBC Securities, wrote in a note. “These include sovereign concerns in the E.U., contentious debt-ceiling talks in the U.S., and general economic uncertainty.”
Gold for August delivery in New York also gained to a record, rallying as much as 0.3 percent to $1,590.80 an ounce. Cash silver jumped 1 percent to $38.5425 an ounce, extending yesterday’s 5.7 percent jump, the biggest gain since May 9.
‘Shock Waves’
Fed Chairman Bernanke said that the U.S. central bank is prepared to provide additional stimulus to bolster the economy, and warned a failure by Congress to raise the $14.3 trillion debt limit would send “shock waves” through the financial system.
Gold may surge to $2,000 if the Fed starts a third round of U.S. debt purchases, according to Michael Pento, senior economist at Euro Pacific Capital Inc. “People will be forced into buying gold,” Pento said.
The Dollar Index, a six-currency gauge of the dollar’s value, dropped as much as 0.3 percent today, falling for a third day after shedding 1.2 percent yesterday and 0.2 percent on July 12. Gold usually moves counter to the dollar.
Ireland this week became the third nation in the European Union to have its credit rating cut below investment grade, helping to send gold priced in euros and pounds to the highest levels ever. Italy is due to sell government debt today amid concern that the crisis may be spreading to that nation.
Greece’s credit rating was cut three levels to Fitch Ratings’ lowest grade for any country in the world as the company yesterday followed rivals and said that a default is a “real possibility.”
Spot gold on the Multi Commodity Exchange of India Ltd. reached an all-time high of 22,724 rupees ($510) per 10 grams yesterday, while cash gold of 99.95 percent purity on the Shanghai Gold Exchange also jumped to a record 329 yuan a gram yesterday. India and China are the world’s largest gold users.
Spot platinum climbed as much as 1.1 percent to $1,773.65 an ounce today, while palladium advanced as much as 0.8 percent to $784.13 an ounce.
http://www.bloomberg.com/news/2011-07-14/gold-rallies-to-record-on-haven-demand-as-debt-concerns-intensify-in-u-s-.html
