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Monday, July 25, 2011

Bright day for precious metals


Lingering concerns for Europe and US's debt ceiling crisis boost stocks

Precious metals moved higher on the flight to safety, once again at Comex on Friday,22 July 2011, aided by lingering questions about how the situation in Europe will play out, as well as concerns about how the debt negotiations are going in the US.

Gold traded to highs, at $1607.70, early in the session, but spent the remainder of the day pulling back slowly from those highs. The contract rose as high as $1,607.70 an ounce intraday.



Silver had a similar pattern of trade, notching highs at $40.30 in mid-morning trade before pulling back throughout the remainder of the day. August gold finished higher by 0.9% to $1601.30 per ounce, while Sept silver gained 2.9% to finish at $40.08 per ounce.

In Washington, the Senate narrowly rejected House-passed legislation that would have raised the U.S. debt limit, paired with sharp spending cuts and a balanced-budget amendment.

The Obama administration has said the $14.3 trillion debt ceiling needs to be raised by 2 August or the government will begin to default on its obligations.

The dollar rose against the euro on Friday, clawing back part of the prior session's losses as initial euphoria over fresh aid for Greece faded and as investors considered other risks in Europe. The dollar index, which tracks the U.S. unit's performance against a basket of six other currencies, rose by 0.33%.