Investing.com – Gold futures rallied to a new record high on Wednesday, as a lack of progress over raising the U.S. debt ceiling before a looming deadline raised fears over a possible U.S. sovereign debt default, boosting the safe haven appeal of the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,625.35 a troy ounce during late Asian trade, gaining 0.25%.
It earlier rose as much as 0.33% to trade at an all-time high of USD1,626.75 a troy ounce, eclipsing the previous high of USD1,625.05 a troy ounce it hit on Monday.
With time running out, U.S. Republican leaders delayed a key vote in the House of Representatives on a plan to increase the country’s USD14.3 trillion debt limit until Thursday at the earliest, adding to investors’ nervousness over a possible sovereign debt default.
Democrats are seeking a combination of spending cuts and revenue increases to solve the debt crisis, while Republicans have vowed that any compromise must not include higher taxes.
Any budget plan to raise the debt limit must pass both the Republican-controlled House and the Democratic-run Senate and be signed by President Obama before the August 2 deadline.
Ratings agencies Moody’s, Standard & Poor’s and Fitch have said they will cut the U.S.’s top-level credit rating in the event that a failure to raise the debt ceiling results in a default.
Meanwhile, global financial service provider Morgan Stanley raised its average gold price forecast for the remainder of 2011 by 22% to USD1,624 a troy ounce.
The investment bank said in a report published late Tuesday that, “a sharp rise in inflationary pressures, the growing risk of sovereign debt default in peripheral countries of the euro zone and the impending threat of technical default by the U.S. government” were all expected to contribute to gold’s strength in the next six months.
Elsewhere on the Comex, silver for September delivery advanced 0.55% to trade at USD41.14 a troy ounce, the highest price since May 4, as investors sought a cheaper alternative to gold.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,625.35 a troy ounce during late Asian trade, gaining 0.25%.
It earlier rose as much as 0.33% to trade at an all-time high of USD1,626.75 a troy ounce, eclipsing the previous high of USD1,625.05 a troy ounce it hit on Monday.
With time running out, U.S. Republican leaders delayed a key vote in the House of Representatives on a plan to increase the country’s USD14.3 trillion debt limit until Thursday at the earliest, adding to investors’ nervousness over a possible sovereign debt default.
Democrats are seeking a combination of spending cuts and revenue increases to solve the debt crisis, while Republicans have vowed that any compromise must not include higher taxes.
Any budget plan to raise the debt limit must pass both the Republican-controlled House and the Democratic-run Senate and be signed by President Obama before the August 2 deadline.
Ratings agencies Moody’s, Standard & Poor’s and Fitch have said they will cut the U.S.’s top-level credit rating in the event that a failure to raise the debt ceiling results in a default.
Meanwhile, global financial service provider Morgan Stanley raised its average gold price forecast for the remainder of 2011 by 22% to USD1,624 a troy ounce.
The investment bank said in a report published late Tuesday that, “a sharp rise in inflationary pressures, the growing risk of sovereign debt default in peripheral countries of the euro zone and the impending threat of technical default by the U.S. government” were all expected to contribute to gold’s strength in the next six months.
Elsewhere on the Comex, silver for September delivery advanced 0.55% to trade at USD41.14 a troy ounce, the highest price since May 4, as investors sought a cheaper alternative to gold.