The debt crisis in Europe and the one approaching in the US helped gold go higher last week.
In fact gold got to within sight of the $US1600 an ounce market that many analysts earlier this year were forecasting would be reached later this year.
Some are even talking about how the $US1700 level is now achievable in 2012.
(That level could very well be reached sooner if America defaults.)
But it was that growing concern about the US government’s ability to avoid a default which boosted gold for a 10th straight day on Friday.
Comex August gold settled at $US1,590.10 an ounce on Friday, up on the week, and just shy of this week’s record nominal price of $1,594.90.
September silver futures jumped nearly 7%, closing at $US39.091 an ounce.
And spot gold was up 0.3% at $US1,591.50 an ounce, near the record of $US1,594.16 hit on Thursday.
Helping the gold market higher was the weakness in the euro and the US dollar.
The Swiss franc and the yen rose.
The euro fell 0.8% to $US1.4157 in New York, from $1.4265 on July 8.
The yen jumped 2.6% against the euro to 112.02 yen , the biggest five-day gain since May 6. The dollar lost 1.9% to 79.13 yen from 80.64.
The franc in fact hit a series of new highs against the euro, squeezing the country’s banks, exporters and other businesses.
No wonder Credit Suisse and UBS are cutting thousands of jobs at home and around the world.
(And Macquarie Group is reportedly looking at hundreds of job cuts or changes in its empire in Australia and offshore).
Gold prices will continue to find strength this week while the debt-ceiling talks in the US drag on and investors continue to worry about the chances for default for Greece and some other European economies.
If an agreement is reached on lifting the debt ceiling, gold prices will fall (as will silver) but the concerns in Europe won’t go away so buying interest will limit the downside for gold prices.
Gold rose 3.2% for the week.
Gold prices have climbed $US107.50 since they closed at $US1,482.60 on July 1.
Oil rose 1.1% over the week.
Nymex New York August delivery settled at $US97.24 a barrel, gaining $US1.55 and rising for a third straight week.
The September contract closed at $US97.60, up $YS1.49.
In London, ICE Brent for September delivery, the new front month, closed at $US117.26, up $US1.
Brent crude lost less than 1% at $US1.07 a barrel.
Other commodities were overshadowed by the action in gold and oil.
