7:51 AM
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The price of gold reached $1,587.97 an ounce on the London
Bullion Market, beating the previous record of $1,577.57 set on
May 1.
"Gold hit a new all-time high today as investors continue to
fret over the European sovereign debt situation," said analyst
Ian O'Sullivan at trading firm Spread Co, noting that the metal
has risen for eight days in a row.
"With Italy, Spain, Ireland and Portugal worries
intensifying and now the Fed minutes suggesting some members were
thinking about the need for additional easing, investors have
just hit the panic buy buttons this week.
"We think that gold may top out here for a while and pull
back to $1,520- 1,540, before an assault on the $1,600 level," he
added.
EU governments are scrambling to fight debt contagion
choking Italy and Spain, amid mounting sentiment that Greece
could default on its debt despite a massive EU-IMF rescue.
"The heightening of sovereign debt uncertainty in Europe has
provided a boost to gold prices despite the seasonal weakness in
demand," said Barclays Capital anlayst Suki Cooper.
Added to the mix, Moody's rating agency unexpectedly slashed
Irish government bonds to junk status on Tuesday, which sent
borrowing costs to the highest levels since Ireland joined the
eurozone.
The International Monetary Fund and European Union rescued
Ireland last year with an enormous emergency loan. Since then,
fellow debt-laden eurozone nation Portugal has also been forced
to seek an EU-IMF bailout, while Greece's rescue has been deemed
insufficient.
"After Greece and Portugal, Ireland is now the third
eurozone country whose government bonds have been assigned a
"junk" rating by at least one rating agency," Commerzbank
analysts said in a note to clients.
Gold won further support from better-than-expected second-
quarter economic growth for Asian powerhouse China, which is a
major consumer of commodities.
Posted in: 588 an ounce,Gold hits record high near $1
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