Gold futures rose to a record settlement as Europe’s escalating debt crisis boosted demand for the metal as a haven investment.
On the Comex in New York, gold futures for August delivery gained $13.10, or 0.8 percent, to settle at $1,562.30 an ounce at 1:39 p.m. on the Comex in New York. The previous record was $1,557.10 on May 2, when the intraday price reached an all-time high of $1,577.40.
The euro fell to a four-month low against the dollar after a meeting of European Union finance ministers failed to defuse the region’s fiscal woes, hunting for ways to reduce Greece’s debt burden. Bond yields surged in Italy and Spain, and European equities posted the biggest three-session slump since March. Gold priced in euros and pounds rose to records.
“With the currency volatility and the debt-contagion risk in Europe, investors are gravitating toward something tangible like gold,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago.
Gold rose as high as $1,573.90 in electronic trading after the settlement. Federal Reserve policy makers disagreed on whether additional monetary stimulus will be needed, even if the outlook for economic growth remains weak, minutes of their meeting last month showed.
Gold futures, up for the sixth straight session, have gained almost 10 percent this year. The price has rallied every year since 2001. The metal will trade above $1,600 in the third quarter and outperform silver, palladium and platinum, Edel Tully, a London-based analyst at UBS AG, said in a report dated yesterday.
‘Flight to Safety’
“It’s a continued flight to safety into gold,” said Frank McGhee, the head dealer of Integrated Brokerage Services LLC in Chicago. “People are worried the debt crisis will spread to Spain, Italy, and ultimately, the U.S.”
Congress is in talks aimed at raising the $14.3 trillion U.S. debt ceiling before Aug. 2, the date when the government is projected to exhaust its borrowing authority.
Silver futures for September delivery dropped 6.4 cents, or 0.2 percent, to $35.634 an ounce on the Comex. Platinum futures for October delivery rose $8, or 0.5 percent, to $1,736.30 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery were unchanged at $767.45 an ounce.
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