Gold strikes another record high

US debt fears continue to impart shine on bullions

Precious metals had a bright day on Tuesday, 26 July 2011 at Comex. Gold futures rose to a record as U.S. lawmakers remained deadlocked over how to pursue a deal to raise the country's debt ceiling.

Gold for August delivery, the contract with the most volume, added $4.60, or 0.3%, to end at $1,616.80 an ounce on the Comex division of the New York Mercantile Exchange.The December contract, which has the most open interest, added $4.90 to $1,619.30 an ounce.



Silver turned higher alongside gold, with the September contract up 34 cents, or 0.8%, at $40.70 an ounce.

Late Monday, President Barack Obama and House Speaker John Boehner touted vastly different debt-ceiling plans. The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk to begin defaulting on its obligations.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by almost 0.53%.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. But bullion metals have registered increase in prices despite strong dollar in recent times and vice versa.

Among economic data expected for the day, the Commerce Department in US reported on Tuesday, 26 July 2011 that sales of new single-family homes in US fell 1.0% to an annual rate of 312,000 in June as purchases in the Northeast dropped to the lowest level since the government began tracking the data in 1973. Market had expected sales to climb to an annual rate of 325,000 on a seasonally adjusted basis. Sales for May were revised slightly lower to an annual rate of 315,000.

The Conference Board in US reported on Tuesday, 26 July 2011 that growing numbers of consumers are expecting more jobs and increased income in coming months as it reported that its consumer-confidence index rose in July.

The nonprofit organization said its consumer-confidence index increased to 59.5 in July from a downwardly revised 57.6 in June. Market was execting a marginal decline in consumer confidence in July. While consumers' expectations improved in July, their views on the present situation declined.

At the MCX, gold prices for June delivery closed lower by Rs 93 (0.4%) at Rs 23,137 per ten grams. Prices rose to a high of Rs 23,258 per 10 grams and fell to a low of Rs 23,060 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed higher by Rs 283 (0.5%) at Rs 60,100/Kg. Prices opened at Rs 59,969/kg and rose to a high of Rs 60,250/Kg during the day's trading.