Gold futures rose for the third straight session as the prolonged U.S. debt stalemate boosts demand for the precious metal as a haven.
The dollar fell against a basket of six major currencies and U.S. equities declined as lawmakers offered competing plans on raising the $14.3 trillion debt ceiling. Gold has jumped 7.8 percent this month amid fiscal woes in the U.S. and Europe.
“The flight-to-quality money is reasserting itself into gold,” Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago, said in a telephone interview. “The budget problems are persistent, and people want to own gold during this calamity.”
Gold futures for December delivery rose $4.90, or 0.3 percent, to settle at $1,619.30 an ounce at 1:48 p.m. on the Comex in New York. Earlier, the price fluctuated between gains and losses. The August contract reached a record $1,624.30 yesterday.
President Barack Obama. in a speech last night, warned of a “deep economic crisis” without a compromise to avert a default.
“When the issues get resolved, the gold price could tumble, so short term, I’m bearish,” Tom Winmill, who manages the Midas Fund in New York, said on Bloomberg Television’s “Street Smart” before Obama’s address. “It could go down $100. That’s the fear premium that’s built up.”
Silver futures for September delivery rose 33.7 cents, or 0.8 percent, to $40.698 an ounce on the Comex.
Platinum futures for October delivery gained $13.20, or 0.7 percent, to $1,807.20 an ounce on the New York Mercantile Exchange. Palladium futures for September delivery gained $27.20, or 3.4 percent, to $836.10 an ounce.