Commodity Top NEWS For 26 July 2011

Posted by Naresh Tomar on Tuesday, July 26, 2011

Gold rose to fresh record high on Monday as talks over lifting the debt ceiling appeared to be stalling just days before the August 2 deadline, raising the prospect of a debt default :- Spot gold climbed as high as $1,622.49 an ounce versus Friday's high of $1,607.01 and the previous record of $1,609.51 before easing back to $1,614.66 by 0007 GMT, Reuters data showed. President Barack Obama and congressional leaders struggled late on Sunday to break a partisan deadlock on a budget deal and bullion dealers said investors were ditching stocks in favor of safe haven assets, such as gold, until the outcome of talks become clearer. A slightly weaker U.S. dollar at the start of early trading in Asia gave gold its initial lift, though bullion continued to firm even as the greenback later stabilized, according to bullion dealers. Source :- Reuters

Oil Falls in New York After U.S. Lawmakers Fail to Reach Debt Agreement :- Oil declined for the first time in five days on concern a failure to reach a deal on raising the U.S. debt limit may cause the nation to default, threatening the economy of the world’s biggest crude consumer. Futures dropped as much as 1.3 percent after House Speaker John Boehner told Republicans that there’s no agreement on a plan for increasing the ceiling before a default threatened for Aug. 2. Standard & Poor’s has warned there is a 50 percent chance it will lower the U.S. government’s AAA credit rating by one or more levels. Greece’s long-term foreign currency debt was cut three steps by Moody’s Investors Service today. Source :- Bloomberg news

Copper Cushioned by Dollar and Fundamentals :- Copper came under selling pressure on Monday as investors fretted about the risk of debt default in the United States, but the lower dollar, as well as strong supply and demand fundamentals, helped cushion losses. Aluminium used in transport and packaging touched $2,611.75, its highest since June 15, as London Metal Exchange inventory data signalled higher demand. Benchmark copper on the London Metal Exchange traded at $9,640 a tonne in official rings from $9,675 at the close on Friday. The metal, used in power and construction, has traded in a $9,608 to $9,675 range so far on Monday.A bitterly divided Congress has set the United States on a collision course with financial markets as Democrats and Republicans pursue rival plans unlikely to generate the broad support needed to avert a catastrophic debt default. We have a situation where if they don't get an agreement on raising the U.S. debt level that will be bearish for all assets," said Robin Bhar, analyst at Credit Agricole. "But bizarrely the weakening dollar is supporting commodities. Source :- Reuters

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