By: Reuters
Spot gold [XAU= 1614.23 
15.39 (+0.96%) 
], which has risen nearly 14 percent so far this year, climbed more than 1 percent to a record of $1,622.49 an ounce, before easing to $1,613.04 by 0301 GMT. U.S. gold futures![[cnbc explains]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_syuYBtGzjLe8W9Fk5fClOhG790s5E89cRSuW3RHwMqiRksLq52k-NOFdOq-9qbu1LZWEo5515kuLjaEysCN_Tv0zez3m3d3WE371DMOLEgZipK83xMKPJv1Feei9Y7e-Ta5avWsVzofCeFoagMOlTMk3L6qfleILyaVd9LTpuCMy2iNX1jDnEOl0cKtBcqew=s0-d)
also hit a record at $1,624.30. It was last quoted at $1,613.30.
Clocks are ticking towards the August 2 deadline for U.S. deficit talks, while President Barack Obama and congressional leaders struggled late on Sunday to break a partisan impasse.
"Markets are focusing on whether the negotiations will be resolved," said Natalie Robertson, a commodities analyst at ANZ. "At this time, we'll see continued volatility and increased safe-haven buying in gold."
Hedge funds and other large speculators last week boosted their bullish bets in U.S. gold futures to the highest in nearly two years as gold rallied on the euro zone's debt crisis and uncertainties around the U.S. deficit talks.
Rating agency Standard & Poor's last week reiterated that there was a 50-50 chance the U.S. AAA credit rating could be cut within three months.
Concerns over the ongoing euro zone debt crisis and worries about U.S. recovery have led analysts to revise up their forecast for gold prices for 2011 and 2012, a Reuters poll showed.
However, gold could potentially suffer a sell-off if the U.S. reaches an agreement on the debt ceiling, as some traders expected the possibility of a U.S. default to be rather limited.
"If the U.S. defaults, gold will go up. If they manage to deal with it, we may see gold come down quite quickly," a trader based in Singapore said.
Spot gold has rallied in 14 of this month's 17 trading sessions, and is up 7.6 percent from the end of last month. But so far this year, it has lagged spot silver's 31 percent climb.
The U.S. dollar steadied against a basket of currencies as investors looked for signs of progress to break the deadlock in the U.S. budget talks.
Gold hit a record high above $1,620 an ounce on Monday, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.
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15.39 (+0.96%) ], which has risen nearly 14 percent so far this year, climbed more than 1 percent to a record of $1,622.49 an ounce, before easing to $1,613.04 by 0301 GMT. U.S. gold futures also hit a record at $1,624.30. It was last quoted at $1,613.30. Clocks are ticking towards the August 2 deadline for U.S. deficit talks, while President Barack Obama and congressional leaders struggled late on Sunday to break a partisan impasse.
"Markets are focusing on whether the negotiations will be resolved," said Natalie Robertson, a commodities analyst at ANZ. "At this time, we'll see continued volatility and increased safe-haven buying in gold."
Hedge funds and other large speculators last week boosted their bullish bets in U.S. gold futures to the highest in nearly two years as gold rallied on the euro zone's debt crisis and uncertainties around the U.S. deficit talks.
Rating agency Standard & Poor's last week reiterated that there was a 50-50 chance the U.S. AAA credit rating could be cut within three months.
Concerns over the ongoing euro zone debt crisis and worries about U.S. recovery have led analysts to revise up their forecast for gold prices for 2011 and 2012, a Reuters poll showed.
However, gold could potentially suffer a sell-off if the U.S. reaches an agreement on the debt ceiling, as some traders expected the possibility of a U.S. default to be rather limited.
"If the U.S. defaults, gold will go up. If they manage to deal with it, we may see gold come down quite quickly," a trader based in Singapore said.
Spot gold has rallied in 14 of this month's 17 trading sessions, and is up 7.6 percent from the end of last month. But so far this year, it has lagged spot silver's 31 percent climb.
The U.S. dollar steadied against a basket of currencies as investors looked for signs of progress to break the deadlock in the U.S. budget talks.
Spot silver [XAG= 40.51 0.49 (+1.22%) ]gained 0.8 percent to $40.34, after a gain of 1.9 percent last week. U.S. silver futures[SICV1 40.43 0.308 (+0.77%) ] rose 0.7 percent to $40.39.
Platinum group metals edged down, tracking weakness in equities. But sentiment is supported by looming strikes in South Africa, the world's biggest producer of such metals.
Spot platinum [PLCV1 1795.00
-3.40 (-0.19%) ] inched down 0.3 percent to $1,787.99, after rising 2.6 percent last week. Spot palladium [PACV1 805.15 -1.25 (-0.15%) ] was nearly flat at $803.50, holding onto a 4.3-percent weekly gain.
"However, concerns about demand may temper prices in the near term; beyond this, we would expect prices to extend their gains as fundamentals remain constructive," said Barclays Capital in a research note.
0.49 (+1.22%) ]gained 0.8 percent to $40.34, after a gain of 1.9 percent last week. U.S. silver futures[SICV1 40.43 0.308 (+0.77%) ] rose 0.7 percent to $40.39. Platinum group metals edged down, tracking weakness in equities. But sentiment is supported by looming strikes in South Africa, the world's biggest producer of such metals.
Spot platinum [PLCV1 1795.00
-3.40 (-0.19%) ] inched down 0.3 percent to $1,787.99, after rising 2.6 percent last week. Spot palladium [PACV1 805.15 -1.25 (-0.15%) ] was nearly flat at $803.50, holding onto a 4.3-percent weekly gain. "However, concerns about demand may temper prices in the near term; beyond this, we would expect prices to extend their gains as fundamentals remain constructive," said Barclays Capital in a research note.
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