Gold at record; stocks slip

Gold prices hit a record high on Thursday in the wake of Moody''s warning that the US government may lose its top credit rating, while stocks and oil prices fell on comments by Fed Chairman Ben Bernanke. Stocks reversed early gains after the US central bank chief''s comments dampened investor speculation that more economic stimulus may be on the way.
Oil prices also declined, while the US dollar edged higher. Spot gold touched a record $1,594.16 an ounce and was up 0.4 percent at $1,588.06. US gold futures for August delivery gained $3.40 an ounce at $1,588.90. The precious metal is on track for its ninth straight daily rise, its longest run of gains since October 2006. During that period, bullion has risen more than 7 percent.
"This is more about fear, about the dollar, the debt troubles in Europe, as well as the possible downgrade of the US credit rating by Moody''s," said Commerzbank analyst Eugen Weinberg. "For gold, this is (one of) the best times." In the foreign exchange market, the US dollar was up 0.08 percent against a basket of currencies. Both the euro and dollar at one point hit record lows against the Swiss currency as investor demand for the traditional safe haven remained elevated.
Bernanke, in a second day of delivering the Fed''s semiannual monetary policy report to the US Congress, repeated his statement that the Fed stood ready to take more action should the economy weaken further. But he also said that inflation was higher now than it was late last year, so the Fed is not ready yet to take action.
The Fed''s easy money policies since 2008 have helped bolster stocks. The Standard & Poor''s 500 index is up about 95 percent from its March 2009 closing low. Technology stocks led the losses on Wall Street on Thursday. The Dow Jones industrial average was down 36.40 points, or 0.29 percent, at 12,455.21.
The Standard & Poor''s 500 Index was down 6.81 points, or 0.52 percent, at 1,310.91. The Nasdaq Composite Index was down 32.25 points, or 1.15 percent, at 2,764.67. World stocks as measured by MSCI were down 0.7 percent while the FTSEurofirst 300 ended down 0.9 percent. Japan''s Nikkei ended down 0.3 percent. Oil prices dropped in volatile trading following Bernanke''s comments.