Gold Soars To $1,600 A Troy Ounce
Gold Soars To $1,600 A Troy Ounce
Global stocks drop, gold hits record on Europe fears
Global stocks drop, gold hits record on Europe fears
Global stock markets and the euro fell on Monday, rocked by debt in the eurozone and the United States, and gold soared above $1,600 for the first time in history as investors sought safety.
Europe's banking sector slid as traders expressed doubts over Friday's EU stress tests which gave a clean bill of health to most banks but did not examine the possible impact of a eurozone sovereign default, dealers said.
Investor focus is moving towards Thursday's Brussels summit of eurozone leaders who will seek to settle their debt crisis and stop Greece toppling into a possible default and dragging bigger euro economies into deeper trouble.
In late morning deals, London's FTSE 100 index of leading companies sank 0.94 percent to 5,788.99 points, Frankfurt's DAX 30 plunged 1.06 percent to 7,143.26 points and in Paris the CAC 40 dived 1.23 percent to 3,680.71.
Madrid's stock market slipped 0.28 percent and Milan lost a hefty 1.61 percent in value.
The euro retreated to $1.4046 in morning London trade, compared with $1.4156 late in New York on Friday.
Gold surged to a record high at $1,600.80 on the London Bullion Market, as the precious metal extended its recent record-breaking surge.
"Money continues to move out of equities and into gold as ongoing eurozone debt concerns continue to gather momentum," said ETX Capital trader Manoj Ladwa.
"While the precious metal trades up at all-time highs, European stocks are trading sharply lower as borrowing costs for sovereign debt soars."
The Swiss franc climbed to fresh record high levels against the single currency, hitting a 1.1404 francs versus the euro.
Gold and the franc are regarded by most investors as safe havens in times of global economic turmoil.
Meanwhile, Asian stocks edged down Monday on fears US lawmakers will not agree a budget to avoid a potentially catastrophic default in the world's biggest economy.
Politicians are wrangling over a $1.5-trillion deficit reduction plan that would allow a crucial increase in the US debt ceiling.
If the $14.3-trillion debt ceiling is not increased by August 2, Washington has warned, it faces the choice of defaulting on its existing debt or huge cuts in spending that could contract the economy -- or a combination of both.
"Investors are now adding real fears of a US default to go along with their European sovereign worries," said Spread Co analyst Ian O'Sullivan.
Markets had slid last week as the eurozone debt crisis, which has already sunk Greece, Ireland and Portugal, showed signs of spreading to Italy and Spain.
The EU's European Banking Authority announced late on Friday that only eight of 91 European banks had failed so-called "stress tests" which were designed to assess their capital levels.
Five Spanish banks, two Greek and one Austrian bank failed to meet the regulator's new capital requirements, while another 16 financial institutions only just scraped through with a pass.
A ninth bank, Germany's Helaba, said it had failed according to the EBA's standards but passed on its own calculation.
However, economists have cast doubt on the credibility of the tests because they failed to examine the impact of a potential eurozone nation default.
"It is impossible to gauge any sort of worst case scenario, because the worst case scenario was not included," said VTB Capital's Neil ManKinnon.
"Even though only eight banks did not pass their exams when almost double that were expected to, investors are all too quick to remember that last year's tests saw all the Irish banks pass only for them to be bailed out shortly after swiftly followed by the whole country."
The EBA had set out certain capital requirements it deems essential to act as a buffer against unforeseen financial shocks.
The EBA said the banks, which also included one from Austria, had a total shortfall of 2.5 billion euros ($3.5 billion), while the total number of failures was less than expected by markets.
Source: Yahoo News.
Yahoo News credited AFP.com for their information. Check out AFP.com for other articles on this topic.
Gold futures rise above $1,600 an ounce
Gold futures rise above $1,600 an ounce Worries about euro-zone crisis and U.S. debt ceiling boost gold to record
By Claudia Assis and Polya Lesova, MarketWatch
Excerpt from article
SAN FRANCISCO (MarketWatch) - Gold futures rallied above $1,600 an ounce Monday, as concerns about the euro-zone debt crisis and the lack of agreement on raising the U.S. debt ceiling prompted investors to seek a safe haven in the precious metal.
Gold for August delivery /quotes/zigman/700181 GC1Q +0.87% rose $16.10, or 1%, to $1,606.30 an ounce on the Comex division of the New York Mercantile Exchange. A close around these levels would be a record settlement for gold.
The contract traded as high as $1,607.90 an ounce, an intraday record for the metal, according to data from FactSet.
Gold futures finished last week at a record nominal settlement price of $1,590.10 an ounce.
“European sovereign fears, combined with wrangling over raising the debt ceiling, have boosted safe havens,“ said Kathleen Brooks, analyst at Forex.com, in a note.
“Recently gold has outpaced silver; however, with gold reaching a record $1,600 per ounce this morning, we think that silver may play catch-up,“ she said.
Indeed, silver for September delivery /quotes/zigman/704345 SI1U +3.12% added $1.42, or 3.7%, to $40.49 an ounce.
A close around these levels would be silver’s highest since early May, when silver was on its way down from nearly $50 an ounce in late April.
Silver was the worst performer among precious metals in the second quarter, but it could outperform gold toward the end of the summer, said Anne-Laure Tremblay, analyst with BNP Paribas, in a note.
“If current uncertainties about the debt deal in the U.S. and risks of contagion of the fiscal crisis in the euro zone subside, then the gold price, to which silver is tied, may be range-bound during the summer,” Tremblay said.
Source: MarketWatch Read entire article and others on this topic at MarketWatch.com
WSJ's Paul Vigna Speaks on Gold reaching $1,600 a troy ounce.
Article Excerpt
Debt Fears Catapult Gold over $1,600
BY MATT DAY AND TATYANA SHUMSKY
NEW YORK-Worries about government debt on both sides of the Atlantic pushed gold above $1,600 a troy ounce for the first time as investors looked to the metal as a safe place to park cash.
Gold futures have marched higher for 10 consecutive sessions as investors stocked up on the metal amid wrangling over the U.S. debt limit and amid worries about the European Union's ability to stave off a default by one of its debt-laden members.
Gold has been one of the best performing assets of the last decade, pushing into uncharted territory and raising concerns that the market ...Read The Whole Article
WSJ's Paul Vigna reports gold has topped $1,600 a troy ounce. (Photo: Reuters)
Record-High Gold Pricing Leads To Gold Bullion Rush & Stock Market Chaos
As the stock market continues to crumble under the Fed, record-high pricing is seeing investors and private individuals rush to buy gold bullion. Courtesy: ABC World News
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