Gold prices August 8 2011, $1,715.29 a troy ounce Asian trading : Spot gold breached key resistance at $1,700 a troy ounce to hit a record high of $1,715.29/oz in Asian trading Monday as risk aversion sent investors scurrying for safe havens such as gold and silver after rating agency Standard & Poor's downgraded the U.S. government's debt rating by one notch to AA+, clouding the outlook for the world's biggest economy.
Spot gold, which has been steadily rising in recent weeks amid growing global economic uncertainty, rallied past the key psychological resistance level after Dow Jones Industrial Average futures fell over 300 points in screen trade as fresh concerns about global economic outlook weighed on investor sentiment.
At 0600 GMT, spot gold was trading around $1,712.00/oz, up $49.20 or 2.68% from its previous close. Read Gold prices prediction August 2011...
With the demise of the U.S dollar as a safe haven, the appeal of gold has increased, a Singapore-based trader said. "In the past, investors could move their cash into the dollar and gold, but the dollar is no more an option."
Analysts and traders are still analyzing the full impact of the downgrade which could push up borrowing costs at a time when higher rates could hurt growth even further and push the U.S economy into another recession.
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