New York 26/07/2011 - Gold on the Comex division of the New York Mercantile Exchange closed modestly higher Tuesday; however, the upward momentum has slowed somewhat as investors have grown tired of trading on the rhetoric and rumours emanating from the US.
Gold futures for August delivery in New York settled up $4.60, or 0.3 percent, at $1,616.80 an ounce, which is an all-time settlement high. Nevertheless, the yellow-metal was not able match the lifetime intraday record of $1624.30 set yesterday.
“Everyone's really fed up with the Republicans and Democrats. Just agree to a deal already and let's move on with life,” a US-based gold trader said.
In Washington, Congress and White House continue to bicker over the best way to reduce the country's debt and raise the $14.3 trillion debt ceiling. Lawmakers have until August 2 to act or face a possible credit event.
“The markets have priced in the assumption that Congress will raise the debt limit and will agree to an underwhelming package of spending cuts. Wall Street has tuned out much of the other noise surrounding the debt negotiations and is now trading mostly off currency movements,” he added.
Gold and other commodities benefited Tuesday from a sharply weaker dollar, which was last at 1.4515 against the euro, down about a half cent.
In other news, US CB consumer confidence for July came in at 59.5, beating expectations of 57.1 and above 57.6 last time, although this figure was downgraded from 58.5. The Richmond manufacturing index reading at -1 was below an expected 5 and down from 3 in the previous month. New home sales for June came in below a forecast of 321,000 at 312,000; the previous figure was also cut to 315,000 from 319,000.
As for the other precious metals, Comex silver for September delivery closed up 33.7 cents at $40.698 an ounce. Trade ranged from $40.015 to $40.685.
Platinum for October delivery on the Nymex settled up $13.20 at $1807.20 an ounce, while the September palladium contract finished up $27.10 at $836.10 an ounce.
(Additional reporting by Royston Wild)