Gold Rallies to New Highs
Tuesday, 02 August 2011

Gold rallied to its ninth record high this year on Tuesday, as growing fears about the spread of the European debt crisis and the increasingly gloomy outlook for the U.S. economy fed a broad investor push into perceived safe-haven assets.

U.S. lawmakers averted an unprecedented default on the country's debt on Monday but the likelihood of the United States losing its top-notch credit rating as a result of its ballooning deficits boosted the likes of gold, the Swiss franc and German government bonds.

Stocks and bonds of the euro zone's more fragile members came under fire on Tuesday, pushing yields [cnbc explains] on Spanish and Italian debt to 14-year highs, while Italian authorities held emergency talks and Spain's economy ministry kept in permanent contact with its European Union counterparts to try to stem the crisis.

U.S. December gold futures were last up 0.4 percent on the day at $1,628.80.

Spot gold was last up 1.3 percent on the day at $1,638.79 an ounce, having touched an all-time high of $1,640.39 earlier in the day, marking its ninth record this year ahead of the vote in the U.S. Senate later to enshrine the last-minute deal on raising the country's debt limit [cnbc explains] into law.


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