Gold marched to a record above $1,600 on Monday, stretching its rally to an unprecedented eleventh day on fears that US lawmakers could fail to raise the debt ceiling to avert a default. Gold rallied even as the US dollar strengthened, helping the precious metal hit record highs versus the euro and sterling.
The precious metal has been on a solid footing since Europe started struggling to put together a second bailout for Greece and contain the euro zone debt crisis. Bullion has gained 8 percent in 11 days as President Barack Obama and Congress have failed to reach an agreement to raise the $14.3 trillion US borrowing limit with less than three weeks before the August 2 deadline.
Technical charts indicate gold should rise above $1,700 an ounce in the next few months.
Spot gold rose as high as $1,607.01 an ounce and was up 0.7 percent at $1,603.89 an ounce by 2:20 pm EDT (1820 GMT). It has now set record highs in three out of the last four sessions. It rallied 10 straight days in 1970. US gold futures for August delivery settled up $12.30 at $1,602.40 an ounce after trading between $1,591.40 and $1,607.90. Volume came to 130,000 lots, sharply lower than turnover during last week's rallies to then-record highs.
While gold has increased over sixfold from just $250 in 2001, the metal remains one of the few commodities which has not surpassed its inflation-adjusted records - with bullion's adjusted all-time high at above $2,300 set in 1980.
Silver soared nearly 4 percent, topping $40 an ounce for the first time since early May. Silver hit a two-month high of $40.70 and ended up 2.5 percent at $40.27. Silver has rallied more than 15 percent in the last two weeks. Among the platinum group metals, spot platinum was up 1.3 percent at $1,771 an ounce, while spot palladium was up 2.8 percent at $792.47 an ounce.
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