Gold prices rallied to a record high $1,497.20 an ounce on Monday after Standard & Poor's downgraded its credit outlook for the United States and as investors worried about debt in the eurozone and inflation in China. S&P said it might cut its long-term rating on the United States within two years, prompting investors to buy gold as a hedge against economic uncertainty.
The ratings agency cited a risk that policymakers may not reach agreement on a plan to slash the huge federal budget deficit. "The US debt situation got a reality check this morning from the move by S&P," said John Kilduff, a partner at Again Capital in New York. Spot gold rose 0.8 percent at $1,495.60 an ounce by 2:00 pm EDT (1800 GMT), set for a gain for the fourth consecutive session.
US gold futures for June delivery rose $10.60 an ounce to $1,496.60, with volume already topping a busy 190,000 lots, preliminary Reuters data showed. Gold rose as the Reuters/Jefferies CRB index fell 1 percent, led by a more than 2 percent drop in US crude futures.
Gold gained support from talk that Greece may be forced to restructure its debt and on uncertainty over a bailout for Portugal. Gold remained far below its all-time inflation-adjusted high, estimated at almost $2,500 an ounce, set in 1980, an era of Cold War tension, oil shocks and hyperinflation.
Among other precious metals, silver gained 0.3 percent to $43.12 an ounce, having earlier hit a 31-year high at $43.51 an ounce. Silver has been the best-performing precious metal so far this year, up 40 percent since January. Platinum eased 0.3 percent at $1,777.99 an ounce, while palladium dropped 3.3 percent to $735.22.
Comments
Comments are closed for this article.