Gold and U.S. debt

Source: market watch

Gold for August delivery GC1Q +0.48%  pushed above $1,600 an ounce in electronic trading on Monday. Read more: Gold futures rise above $1,600 an ounce.

Investors also remain focused on the deadlock over raising the U.S. government’s debt limit, analysts said. The federal government could begin to default on obligations if the debt limit isn’t raised by an Aug. 2 deadline.

Investors want to see an agreement by this Friday, in hopes that would give legislators enough time to draft legislation, wrote analysts at BNP Paribas.

“The assumption across markets remains that a solution will be found, but if the guts of an agreement cannot be settled by then, markets will be subject to another round of stress as the implications of a default on the globe’s ‘risk-free’ asset get priced in,” the strategists said, in a research note.

“Deleveraging would likely see [the dollar] go bid; but other safe- haven currencies would also benefit,” they said.

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The British pound GBPUSD -0.36%  bought $1.6084, down from $1.6135 late Friday.

Against the Japanese currency, which also benefits from safe-haven flows, the dollar USDJPY -0.02%  bought 79.05 yen, little changed from ¥79.07 late Friday.

The Australian dollar AUDUSD -0.48%   traded at $1.0614, down from $1.0647 late Friday.