Tags: Gold | Futures | Longest | Rally | Since | 2009 | Debt

Gold Futures Cap Longest Rally Since 2009 on U.S. Debt Woes

Friday, 15 Jul 2011 03:54 PM

Gold futures rose, capping the longest rally since November 2009, on mounting concern that debt woes in the U.S. will escalate, boosting the appeal of the precious metal as a haven.

Standard & Poor’s became the second rating company to say it may cut the U.S.’s top credit grade, and the Federal Reserve said it may consider a third round of so-called quantitative easing if the economy falters. Yesterday, gold rose to a record $1,594.90 an ounce.

“The flight-to-quality buyers are emerging,” Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago, said in a telephone interview. “People are starting to question if the U.S. economy can keep its footing and keep QE3 off the table.”

Gold futures for August delivery rose 80 cents to settle at $1,590.10 at 1:37 p.m. on the Comex in New York. The metal gained 3.1 percent this week and was up for the ninth straight session.

U.S. consumer confidence unexpectedly fell in July to the lowest in more than two years, according to the Thomson Reuters/University of Michigan preliminary index. Industrial production rose 0.2 percent in June, less than forecast, government data showed.

President Barack Obama and congressional leaders have failed to reach a compromise on reducing deficits and raising the debt ceiling. The government will exceed its borrowing authority on Aug. 2, the Treasury Department has said.

Today, gold priced in euros climbed to an all-time high after eight banks failed European Union stress tests.

Silver futures for September delivery rose 37.7 cents, or 1 percent, to $39.071 an ounce, capping a 6.9 percent gain this week.

Palladium futures for September delivery slipped $2.70, or 0.3 percent, to $780.65 an ounce on the New York Mercantile Exchange. The price climbed 0.2 percent this week. Platinum futures for October delivery fell $18.80, or 1.1 percent, to $1,755.50 an ounce. The metal rose 1.3 percent this week.

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Gold futures rose, capping the longest rally since November 2009, on mounting concern that debt woes in the U.S. will escalate, boosting the appeal of the precious metal as a haven.Standard Poor s became the second rating company to say it may cut the U.S. s top credit...
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