Gold for June delivery added $6.90 to settle at $1,492.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price was adding more than $9.80, according to Kitco's gold index. Prices traded as high as $1,498.60 and as low as $1,477.80. Gold for June delivery was recently trading $11.40 higher at $1,497.40
Silver prices for June delivery were surging 64 cents to $43.23.
Gold and silver had an explosive two-day rally, up 2% and 5.8%, respectively, to close out last week as investors bought gold as protection against inflation. Although prices had been trading weaker all morning, they spiked after Standard & Poor's maintained its triple-A rating for the U.S. but cut its outlook to negative, signaling that a ratings downgrade could come in the next two years. The ratings agency expressed concern that U.S. policymakers haven't addressed critical fiscal issues.
Several other economic readings offered more appeal to gold. The National Association of Home Builders' April housing market index also fell to a reading of 16, compared with market expectations that it would remain unchanged at March's level of 17. On Sunday, the People's Bank of China said it will raise the reserve requirement for banks by half of a percentage point to dampen inflation. Gold mining stocks, a risky but potentially profitable way to buy gold, were falling. Kinross Gold (KGC) was falling 2% to $15.35 while Goldcorp (GG) was down 0.4% at $53.93. Other gold stocks, Agnico-Eagle (AEM) and Eldorado Gold (EGO), were trading more than 1% down at $64.19 and $17.82, respectively.
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