Will the trend to hedge in tangible assets continue?
''Spot gold traded just short of a fresh record high in Europe Tuesday, amid increasing fear that the U.S. will be unable to repay its debts.
In mid morning, spot gold was at $1,622.19 a troy ounce, having hit a new all-time high of $1,625.54/oz earlier. Late Tuesday in New York, gold was bid at $1619.90.
The rest of the precious metal complex was also higher. Palladium was trading at $836.25 per ounce, just short of a fresh five-month high of $842. The metal was bid at $833 late in New York.
Spot silver was at $40.898 per ounce, from $40.91 in New York, and spot platinum was at $1,805.50 per ounce. Late in New York, platinum was bid at $1,802.00.
Gold prices have rallied in recent weeks amid increased appetite for tangible assets amid economic uncertainty in both Europe and the U.S. While debt contagion in the euro zone remains a major concern, a debate over the raising of the U.S's borrowing limit is at a stalemate, heightening concern that a deal may not be reached by Aug. 2, triggering a default on the country's debts and a downgrade of the nation's AAA credit rating.
While both a resolution to the debate and a U.S. default could trigger some short-term losses in gold, the metal's general path looks set to remain upward, said traders and analysts Wednesday.''