Gold Futures Rise to Record Amid Impasse on U.S. Debt Accord, Dollar Slump
Gold Rises to Record as ‘Go-to Asset’ Amid Debt-Talk
Ron D'Raine/Bloomberg
Gold surged to an all-time high in New York as investors sought to protect their wealth against the possibility of a U.S. default that may come as soon as next week amid a standoff over the country’s $14.3 trillion debt limit.
Gold surged to an all-time high in New York as investors sought to protect their wealth against the possibility of a U.S. default that may come as soon as next week amid a standoff over the country’s $14.3 trillion debt limit. Photographer: Ron D'Raine/Bloomberg
July 26 (Bloomberg) -- Keagan York, head of foreign-exchange strategy at Compass Global Markets, discusses the outlook for the Australian dollar, British pound and gold. York, speaking from Sydney with Mark Barton on Bloomberg Television's "First Look," also talks about the U.S. debt-ceiling debate. (Source: Bloomberg)
July 26 (Bloomberg) -- Steve Brice, chief investment strategist at Standard Chartered Bank, talks about the outlook for global stocks and gold. Brice also discusses negotiations between lawmakers over raising the U.S. debt limit. He speaks from Singapore with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
July 26 (Bloomberg) -- John Brynjolfsson, chief investment officer at Armored Wolf LLC, talks about the outlook for financial markets after a political stalemate over raising the U.S. federal debt ceiling intensified. Brynjolfsson speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
July 25 (Bloomberg) -- Thomas Winmill, president of Winmill & Co. and portfolio manager of the Midas Fund, talks about the outlook for gold, silver and platinum prices. He speaks with Carol Massar and Matt Miller on Bloomberg Televison's "Street Smart." (Source: Bloomberg)
July 25 (Bloomberg) -- Suki Cooper, a precious metals analyst at Barclays Capital, talks about gold and silver prices during negotiations over the U.S. debt ceiling and the potential impact of a U.S. credit downgrade on precious metals. Cooper speaks with Lisa Murphy on Bloomberg Television's "Bottom Line." (Source: Bloomberg)
Gold futures rose to a record $1,631.20 an ounce as the impasse on the U.S. debt ceiling boosted demand for the precious metal as a haven.
The cost of insuring U.S. debt rose to a 17-month high, and the dollar fell to a record against the Swiss franc as congressional leaders offered competing budget plans. Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have said they will cut the U.S.’s top-level credit rating should a failure to raise the debt ceiling lead to a default.
“Government securities, the traditional area of safety, are now at risk, so that’s why you’re seeing gold grind higher,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The level of U.S. government borrowing has caused the erosion of the dollar and adds more fuel to the metal’s rally.”
Gold futures for December delivery rose $8.90, or 0.5 percent, to $1,628 at 10:33 a.m. on the Comex in New York. In July, the price has climbed 8.3 percent, heading for the biggest gain since November 2009.
Holdings of gold in exchange-traded products rose 0.3 percent to a record 2,128.229 metric tons yesterday, data compiled by Bloomberg show.
Silver futures for September delivery rose 57.7 cents, or 1.4 percent, to $41.275 an ounce on the Comex.
Platinum futures for October delivery gained $8.80, or 0.5 percent, to $1,816 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery climbed $8.35, or 1 percent, to $844.45 an ounce.
To contact the reporters on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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