Gold Settles Above $1,601 as Worries Over Debt Persist

By: Reuter
Gold rose to settle above $1,601 an ounce on Friday, nearing this week's record high as reservations over a  bailout plan for debt-laden Greece and concerns over talks to raise the U.S. debt ceiling spurred safe-haven buying of precious metals.

Lilli Day | Photodisc | Getty Images

Adding to the uncertainty, and the interest in less risky assets, was an explosion in Norway that purportedly killed two people.

Spot gold [XAU=  1598.78    0.20  (+0.01%)   ]reached $1,607.01 an ounce, its highest since setting a record of $1,609.51 on Tuesday, and was last bid around up at $1,601 an ounce from $1,587.90 late on Thursday.

Prices have risen more than 12 percent so far this year. Analysts have increased their forecast for the gold price both this year and next, over debt concerns on both sides of the Atlantic, while platinum and palladium may struggle for major gains.

U.S. gold futures [GCCV1  1601.50    14.50  (+0.91%)   ] rose $14.50 to end at $1,601.50 an ounce.

The dollar's gains on the euro indicated that investors were seeking less risky assets, including gold.

The euro slipped against the dollar on Friday as investors focused on how the second rescue package for Greece and measures to stop the European debt crisis from spreading will be implemented.

In the United States, Speaker of the U.S. House of Representatives John Boehner told fellow Republicans on Friday there's still no deal to avert a debt default, but that talks continue, a senior party member said.

Meanwhile, U.S. President Barack Obama told a town hall meeting he was sure Congress would reach a deal to avert default.

Investors continue to watch developments on debt situations in both Europe and the United States, but uncertainty surrounding both keeps gold well bid