Bursa Community
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Gold hits record high, oil falls on economy fears

Go down

Gold hits record high, oil falls on economy fears  Empty Gold hits record high, oil falls on economy fears

Post by hlk Wed 03 Aug 2011, 21:52

SINGAPORE: Gold powered to a record high for a third time in four days and U.S. crude dropped to five-week lows on Wednesday, Aug 3 as concerns over the fragile U.S. economy and a widening euro debt crisis drove investors away from riskier assets.

Completion of a last-gasp deal to avoid a U.S. default failed to bring any relief, as markets focused instead on how Washington's efforts to cut spending could slow growth at a time when global industrial activity was already sluggish.

Moody's Investors Service and Fitch Ratings retained their triple-A rating for the United States, but said more deficit-reduction measures are needed for the government to put its finances in order and keep the coveted rating.

Moody's assigned a negative outlook to the rating, underscoring the threat of a future downgrade that would drive up the cost of borrowing, while Fitch said it was not ruling out the possibility of doing the same.

"The deficit is still a big problem and that is creating financial fear," said Ken Hasegawa, a commodities derivatives manager at Japan's Newedge brokerage.

"Even if the debt ceiling issue in the United States has been cleared, that is only successful in that it avoids a default."

Spot gold rose to an all-time high of $1,671.39 an ounce by 0705 GMT, hitting its ninth record in 16 trading sessions and up more than 17 percent so far this year as investors flocked to the safe haven.

U.S. gold climbed to a record of $1,674.60. Sterling- and euro-denominated gold also hit all-time highs.

"The momentum in gold in the short term will continue to run strong, supported by worries about global economic growth, gold purchases by South Korea's central bank announced yesterday and rises in SPDR Gold Trust holdings," said Li Ning, an analyst at Shanghai CIFCO Futures.

OIL DEMAND FEARS

Crude fell to a five-week low on growing worries that major economies may slip back into recession and cause a downturn in oil demand.

U.S. crude fell 95 cents to a session-low of $92.84, its weakest since June 29. Brent slid $1.06 to $115.40 a barrel.

U.S. consumer spending fell in June for the first time in nearly two years and incomes barely rose, adding to signs that the world's biggest economy lacked momentum as the second quarter drew to a close, data on Tuesday showed.

That followed Monday's weak manufacturing data from the United States, Europe and China and last week's disappointing second-quarter U.S. GDP estimate.

In Europe, Italy found itself dragged deeper into the euro zone debt crisis, prompting emergency consultations in Rome and among European capitals. Italian bond yields hit their highest in the euro's 11-year lifetime on Tuesday.

In agricultural markets, Chicago corn climbed to an eight-week high of $7.18-1/2 per bushel, after rising by its daily limit in the last session on concerns hot weather could curb U.S. crop yields . Wheat slipped from a two-week top and soybeans fell 0.3 percent.

Heat stress on U.S. corn and soybean crops will continue this week but relief for crops is expected by the weekend, said agricultural meteorologist John Dee of Global Weather Monitoring.

Among base metals, copper fell 0.3 percent to $9,655 tonne as investors shrugged off the U.S. debt deal and focused on Europe's worsening debt crisis. - Reuters
hlk
hlk
Moderator
Moderator

Posts : 19013 Credits : 45112 Reputation : 1120
Join date : 2009-11-14
Location : Malaysia

Back to top Go down

Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum