Gold advances to record as US debt deadlock boosts demand

LONDON: Gold climbed to a record at USD 1,624.30 in global markets as US lawmakers failed to reach an agreement on raising the federal debt limit, boosting demand for the metal as a protection of wealth.

The gold surged USD 22.80, or 1.4 per cent, to USD 1,624.07 an ounce, after reaching a record USD 1,624.30. Silver also climbed 1.3 per cent to USD 40.60 an ounce.

US House Speaker John Boehner plans to press ahead with a two-step debt-limit extension that President Barack Obama has threatened to veto, fuelling concern the nation is lurching toward a default as early as August 2 and jeopardising its AAA credit rating.

Greece's credit rating was cut three notches by Moody's Investors Service. Europe's debt woes helped bullion reach all-time highs, transacting in euros and pounds last week.

Gold is up 14 per cent this year, heading for an 11th straight annual gain, the longest winning streak since at least 1920 in London.

Investors boosted gold holdings in exchange-traded products to a record 2,122.6 tonnes on July 20. Assets were 2,120.3 tonnes on July 22.