Gold (NYSE:GLD) futures jumped to a record high for the second consecutive day as debt ceiling talks in Washington look to be losing momentum quickly. Early in the day August futures topped out at $1,594.90 per troy ounce, though receded quickly as Ben Bernanke added some clarity to his stance on QE3, telling the senate that the Federal Reserve Bank was “not prepared at this point” to offer a new monetary policy stimulus to the economy. Matthew Zeman of Kingsview Financial said of the movement in prices this week, “Gold is going higher on a witch’s brew of debt crisis, further stimulus, a weaker dollar and a loss of confidence in paper currencies and government.”
Commodity (NYSE:RJI) experts say that a failure to raise the debt ceiling or broker an alternative deal that would prevent the US from defaulting on its debt by a fast-approaching August 2nd. deadline could lift gold prices as high as $2,000. Dealer Frank McGhee noted, “If you don’t have a miraculous solution to all the world’s problems out there, then gold has to go higher…There’s massive safe- haven buying into gold.”
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Silver (NYSE:SLV) too has seen substantial gains from an increasingly frantic marketplace, as futures rose 1.4% in trading today, though are still well off May highs of $49.845, (highest value in 31 years).