Gold spot reach all-time-high. Investors worries on US debt default

Business

oi-Shoaib MD

By Shoaib Md

Published: Wednesday, July 27, 2011, 15:52 [IST]

Gold is shining today, Wednesday. The spot price for gold reached its all-time high for the sixth time in two weeks. This was because of the deadlock between the two major parties in the United States on the raising its debt ceiling. If the debt ceiling is not increased, the government of United States could default over its debt.

Spot gold went up by $1,625, and then eased to $1,624.19. In the month of July (2011), so far, of the 19 trading sessions (days when the market was open), gold prices closed high on 16 days.

In U.S. also, gold hit an all-time high at $1,626. The U.S. House of Representatives have postponed vote on the issue to raise the debt ceiling until Thursday. This narrows the chances for a deal to avert a debt default.

Considering that the deadline to raise the debt ceiling is August 2, and with the level of uncertainty investors are waiting are not making any specific investment move. Reuters quoted a trader that people are on the sidelines waiting to see if US is going to avoid a technical default. Investors are increasingly cautious.

As dollar sank to the three-month low against basket of other major currencies, gold got more attention.

On the other hand, platinum group metals scored multi-month highs, tracking strength in gold. Spot platinum hit $1,813, its highest since June 13. It eased to $1,808.45, up 0.4%.

Spot prices of palladium went up by 11.5% so far this month, the second-best performer after silver, which had gained nearly 19% in July. Platinum lagged behind other precious metals with a 5% month-to-date rise

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