Gold Pops Amid Flight to Safety
NEW YORK (TheStreet) -- Gold prices were gaining on Monday as investors fled stocks and piled into hard assets.
COMEX Gold for December delivery was rising $12.70 to $1,322.60 an ounce. The gold price traded as high as 1,329.50 and as low as $1,307.90 an ounce, while the spot price was up $9.74.
"The debt ceiling is approaching, government [still] shutdown, and [investors] see stocks getting slammed. There's a big flight to safety on gold and silver," said Phil Streible, senior commodities broker at RJO Futures. "That was the big talk this morning."
The major U.S. equities were selling off Monday as investors grew concerned that a protracted government shutdown eventually could jolt the fragile U.S. economy into a recession.The move into gold and silver showed investors were looking for a hedge against possible crisis and other uncertainties. Legislators still haven't reached an agreement to fund resume funding government operations, which Capital Economics last week said is reducing spending by $155 million per day, or the equivalent of 0.3% gross domestic product in a year. More immediately, traders and investors are more worried about a deal to raise the government's debt limit. A prolonged debate in the summer of 2011 triggered broad selloffs across asset classes and injected massive volatility in markets. Though Congress did reach a deal, ratings agency Standard &Poor's followed the event with a downgrading of the United States' credit rating. The inability of the U.S. government to "pay its bills" is seen by investors as an unprecedented scenario that could seriously damage the U.S.'s credibility and sluggish economy. Silver prices for December delivery were gaining 61 cents to $22.37 an ounce, while the U.S. dollar index was sliding 0.19% to $79.98. Gold ETF SPDR Gold Trust (GLD) was rising 0.93% to $127.71, while iShares Gold Trust (IAU) was up 0.94% to $12.84. >Contact by Email. Follow @JoeDeaux
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