Gold jumps to all-time high on Euro fears

Gold (GC-FT1,582.7020.401.31%) rallied to all-time highs on Tuesday, as investors sought a safe haven on fears that European officials were failing to stop a debt crisis from spreading and uncertainty related to frantic U.S. talks to raise its debt limit.

After trading flat for most of the day, bullion suddenly spiked at the end of the U.S. pit session to extend its rally for a seventh day, as crude oil and other commodities rallied and as the euro pared gains.

Bullion has gained over 6 per cent this month on fears about a deepening euro zone crisis, now trading less than $5 below its all-time high of $1,575.79 (U.S.) set on May 2. Gold priced in euro and sterling hit record highs for a second consecutive day.

“With the euro zone debt crisis and the U.S. debt ceiling talks, there is a tremendous flight to quality. Gold is the commodity to invest in because the currencies aren’t doing well,” said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.

Spot gold was up 1 per cent at $1,568.89 an ounce by 2:43 p.m. (ET). U.S. COMEX August gold futures settled up $13.10 at $1,562.30 - a record settlement price - after trading between $1,541.10 and $1,574.30.

The previous record was $1,557.10 on May 2, when the intraday price reached an all-time high of $1,577.40.

U.S. trading volume was around 170,000 lots, one of the heaviest since the start of June, as investors switched their focus back on the gold market as equities have slumped Financial markets hammered European assets after euro zone finance ministers opened the door to a possible Greek default and failed to prevent contagion spreading to Italy and Spain.

Gold in euros rose for a third day, climbing 1.5 per cent to hit a record above 1,123 euros.

Gold priced in higher-yielding currencies, which also suffered the brunt of investor distaste for risk, such as the Australian dollar, the South African rand or the Canadian dollar, also rallied.

“If you live in Greece, you are going to buy gold because that’s the hard money you still trust,” said Axel Merk, portfolio manager who oversees $700-million in mutual fund assets at Merk Investments.

hostgator coupon 2011