8.44pm....Gold futures hit fresh record ....
posted on
Jul 24, 2011 09:16PM
We may not make much money, but we sure have a lot of fun!
By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Gold futures hit a fresh record in electronic trading Monday, as U.S. debt-ceiling talks to avert a default continued, with no apparent progress toward a deal.
Gold for August delivery /quotes/zigman/700181 GC1Q +0.71% gained $16.30, or 1.0% to $1,617.70 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours.
Last week gold reached a nominal record of $1,602.50 an ounce.
Adjusted for inflation, gold would have to settle at around $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980.
The metal has benefitted from the uncertainty stemming from global debt problems in recent weeks, with the deadlock in U.S.negotiations taking center stage on Monday.
White House Chief of Staff Daley said debt talks are moving into "difficult days" and said it is crucial to market confidence to get a deal soon. Video courtesy Reuters.
U.S. lawmakers failed to reach agreement on an approach to raise the debt-ceiling in Washington on Sunday, despite a weekend of talks. President Barack Obama later met with the congressional leaders of his own party.
The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk of defaulting on its obligations. Read more on U.S. debt negotiations.
Analysts at MF Global said the lack of resolution in U.S. debt-ceiling talks will weigh on the U.S. dollar, and present upward potential for gold.
“Raising the debt ceiling in such last-minute fashion relays [an] unwelcome message to investors,” the analysts said, “The main casualty of such a decision will be the US dollar.”
Commodities should do better, at least initially, they said, as the asset class will be viewed as an alternative to paper currencies.
“Gold should benefit the most,” they said.
The dollar index /quotes/zigman/1652083 DXY -0.12% , which tracks the U.S. unit’s performance against a basket of six other currencies, slipped to 74.197, from 74.221 late Friday. Read more on dollar, currencies.
The greenback tends to trade inversely to dollar-priced commodities such as gold, as a lower dollar makes them cheaper for holders of other currencies.
The broader metals complex diverged Monday.
Silver tracked gold higher, with the September contract /quotes/zigman/704345 SI1U +0.61% adding 33 cents, or 0.8%, to $40.45 an ounce.
Copper for September delivery /quotes/zigman/700184 HG1U -0.39% lost 1 penny, or 0.3%, to $4.40 a pound.
October platinum /quotes/zigman/2304883 PL1V +0.10% gained $1.30, or 0.1%, to $1,799.70 an ounce, while palladium for September delivery /quotes/zigman/2304928 PA1U -0.05% lost $2.15, or 0.3%, to $804.25 an ounce.
Virginia Harrison is a MarketWatch reporter based in Sydney.