nex to pour gold and gold price at record high

Gold edges up to new record

Tatyana Shumsky
From: Dow Jones Newswires
July 27, 2011 6:20AM

GOLD edged up to a new record today as concerns about the US debt ceiling crisis dominated market attention, but the mild gains revealed widespread hope that a resolution would be reached before the August 2 deadline.
The most actively traded contract, for August delivery, gained 0.3 per cent, or $US4.60, to settle at a record $US1616.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
US politicians have seven days left to raise the national borrowing limit and avoid default, but the White House and Republican Party leaders are no closer to a deal. Both parties are currently pursuing rival plans to cut spending and raise the so-called debt ceiling.
The Treasury has repeatedly warned that if the so-called debt ceiling is not raised, it will fall short of funds to cover all of the government's loan obligations after August 2.
President Barack Obama warned that without an imminent deal, the country risked defaulting on its debt and having its credit rating downgraded.
"For the first time in history, our country's triple-A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet," Mr Obama said in a prime-time televised address yesterday.
The knock-on effects for every-day Americans would be widespread, ranging from higher interest on credit cards and home loans to further declines in the US dollar's buying power compared to other currencies.
Gold futures have thrust further into uncharted territory as concerns about the US borrowing limit overtook Europe's sovereign-debt crisis, which subsided after Greece secured a second bailout from euro zone members last week.
But gold's record-breaking gains have slowed in recent days in a sign that investors are hoping for the best. Analysts say the market is counting on a so-called 11th hour deal, with investors muting their gold purchases as prices head higher.
"It seems like gold is giving it a big yawn," and current prices are not reflecting the real possibility of a US default, said Ralph Preston, analyst with Heritage West Financial.