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Title: Gold Soars To Record On Poor U.S. Outlook, Debt Worry
Source:
REUTERS
URL Source: http://www.reuters.com/article/2011 ... precious-idUSTRE7592IU20110802
Published: Aug 2, 2011
Author: REUTERS
Post Date: 2011-08-02 16:41:45 by Brian S
Keywords: None
Views: 1183
Comments: 2
Tue Aug 2, 2011 4:00pm EDT Aug 2 - (Reuters) - Gold surged over 2 percent to all-time highs on Tuesday, as investors sought a safe haven from sliding stock markets, a sputtering economy and a potential downgrade of the top-notch U.S. credit rating. Bullion notched its biggest daily gain in eight months even as the U.S. Congress passed a deficit-cutting package and President Barack Obama signed it into law, burying the specter of a debt default. Silver also rose 3 percent. Wall Street stocks tumbled 2 percent for their seventh daily loss, as investors worried a potential downgrade to the U.S. AAA credit rating would raise borrowing costs and further drag on the economy, boosting gold's safe-haven appeal. In addition, weak U.S. data has fed fears that another recession could strike the world's largest economy, prompting investors to buy gold as a hedge against the possibility of more monetary stimulus by the Federal Reserve, analysts said. "The debt ceiling distraction may now be behind the markets, but the damage has been done," said John Kilduff, partner at hedge fund Again Capital LLC. "We are witnessing a quickly deteriorating economic backdrop that will pressure all asset classes. Policymakers need to next implement measures that will foster growth." Spot gold was up 2.1 percent at $1,652.86 an ounce by 3:31 PM EDT, having touched its ninth record this year at above $1,650. U.S. gold futures for December delivery settled up $22.80 at $1,644.50 an ounce. Silver rose 3.5 percent to $40.620 an ounce. Bullion has rallied around 16 percent so far this year, and has gained more than 10 percent since the end of June when the Federal Reserve's $600 billion bond-buying program ended. Some investors worried about the risk of a recession that could prompt the Fed to use more stimulus, feeding inflation. "With the worse-than-expected manufacturing index and personal spending data, gold is starting to factor in the need for further quantitative easing, further stimulus and more accommodative monetary policy, and that's why it's pushed into a record," said James Rife, an assistant portfolio manager at Haber Trilix Advisors, which manages $2 billion in assets. U.S. consumer spending slipped 0.2 percent in June for its first decline since September 2009, the Commerce Department reported, a day after another report showed factory activity cooled in June. U.S. GDP data released on Friday showed the economy stumbled in the first half of 2011 and came close to contracting in the first quarter. FOMC MEETING, CENBANK BUYING IN FOCUS Financial markets will watch the Fed's policy meeting next week for any signs of new monetary stimulus. Some market watchers suggested Chairman Ben Bernanke may take the opportunity at the Fed's annual retreat in Wyoming later this month to hint at economic stimulus through a third round of central bank bond purchases, or quantitative easing. "Gold is supported by the anticipation that any significant slowdown is going to be confronted by monetary authorities with more printing. So, the question is when does the U.S. go back to more printing of money?" said James Dailey, portfolio manager of TEAM Financial Asset Management, which oversees $200 million in assets. Gold has hit record highs in dollars, euros, sterling, South African rand and Canadian dollars, indicating investors' distrust of volatile currencies. Central banks also remain buyers of bullion, with South Korea saying on Tuesday it bought 25 tonnes of gold between June and July to diversify its foreign reserves. It was its first purchase in more than a decade, boosting gold holdings to 39.4 tonnes. David Meger, director of metals trading at Vision Financial Markets, said most investors, asset managers, and even central banks hold true to a view that gold remains the "quintessential currency hedge, a stabilizing asset for portfolios, and a safe haven in uncertain economic times." Gold also benefited as investors sought safe-haven assets such as the Swiss franc and U.S. Treasury debt at the expense of riskier assets, while the dollar and euro hit record lows against the franc. Platinum group metal prices were mixed as investors digested news major automakers posted July U.S. sales that ticked up from the slump of recent months, but failed to dispel doubts about the economy and U.S. consumers. Platinum was up 0.1 percent at $1,789.50 an ounce while palladium eased 0.3 percent at $822.73 an ounce.
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#1. To: Brian S, *The Two Parties ARE the Same* (#0)
(Edited)
The Dow Jones Industrial Average plunged 265.87 points, or 2.19 percent, to end below the psychologically-important 12,000 mark at 11,866.62. Stocks sold off sharply to end at session lows Tuesday with the Dow down for an eighth day amid economic worries and even after President Obama signed a bill to avoid a debt default. The S&P 500 plummeted 32.89 points, or 2.56 percent, to close at 1,254.05, slipping into negative territory for the year. The tech-heavy Nasdaq tumbled 75.37 points, or 2.75 percent, to finish at 2,669.24. The S&P 500 and Nasdaq are both below their 200-day moving averages. hObama and Boehner looking happy kills the market. Wall St knows that's bad news for American business, and the economy. These globalists are only happy when they're screwing America.
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
No one has given more $$$ to Obama than the banks. See Citi Employees first to be hired by Obama for details... The Kabuki Theatre caught on fire is their problem. ;}
Dow Logs 8-Day Loss, S&P Negative for Year (DOW -265)
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
#2. To: hondo68 (#1)
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