Gold extends rally amid concerns over EU debt

09:39, July 13, 2011      

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Gold futures on the COMEX Division of the New York Mercantile Exchange extended rally and settled at a fresh record on Tuesday, as ongoing concerns over the European debt crisis continued to spur safe-haven demands.

The most active gold contract for August delivery hiked 13.1 U. S. dollars, or 0.9 percent, to the all-time high of 1,562.3 dollars per ounce.

Market analysts said that investors are rushing toward such tangible assets as gold, as they are increasingly concerned that the debt crisis could spread to Italy and Spain. Gold is usually seen as a store of value amid economic uncertainties.

The euro fell to a four-month low against the U.S. dollar as investors were concerned that the debt problem could spread to Italy and Spain, two economies bigger than Greece, Ireland and Portugal. Bond yields surged in Italy and Spain, and European equities suffered sharp drops in recent tradings.

Besides, traders and investors were awaiting the release of the decision from the Federal Open Market Committee (FOMC) meetings, which added to market worries. The FOMC is split on a decision whether or not to offer more stimulus.

"If the FOMC does continue the quantitative easing and print more money, it should be bullish for gold," said Mike, a senior analyst with PFGBEST Group.

Gold has been on the rise for six consecutive trading days and has gained ten percent this year. Some traders said that the metal will trade above 1,600 dollars in the third quarter.

However, silver for September delivery dropped 6.4 U.S. cents, or 0.18 percent, to 35.634 dollars per ounce. Platinum for October delivery gained eight dollars, or 0.5 percent, to 1,736.3 dollars per ounce.

Source: Xinhua
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