Commodity News – Gold hits another record high during U.S. session

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Gold hit yet another record high moments after the US session opened this Monday, breaking past $1,600 to hit $1,603.13. The main behind gold’s rise was increasing concern over the driver Euro zone debt crisis and the threat of a U.S. default. Investors turned to gold which is traditionally known to be a safe haven asset in times of crisis.

Risk aversion increased rapidly after Friday’s euro zone stress test results failed to calm market jitters over a Greek sovereign debt default before an emergency EU summit in Brussels on Thursday. Risk aversion was also boosted by a deadline to raise the $14.3 trillion U.S. debt ceiling nears amid a deadlock in the U.S. Congress over the weekend to reach a deal. The White House set a deadline for July 22.

“Gold has room to go up. The smouldering debt crisis in the euro zone peripheral countries and the uncertainty over the debt limit in the United States are currently supporting prices,” said Commerzbank analyst Daniel Briesemann.

He added that “It seems gold will stay well supported unless we get a real and convincing solution from the extraordinary EU summit that takes place on Thursday.”