Daily Gold Update

Source: Marketwatch

San Francisco— Gold futures rallied Tuesday as ongoing concerns about global debt problems fed investment demand for the precious metal, lifting prices by more than $30 an ounce � their biggest one-day dollar gain in eight months. Gold for August delivery rose $30.10, or 2%, to close at $1,512.70 an ounce on the Comex division of the New York Mercantile Exchange. That was the biggest one-day dollar and percentage gain for gold futures since Nov. 4, 2010, as well as the highest closing level since June 23. Debt problems in the U.S. and Europe continue to support gold prices along with currency volatility and political instability all over the world, said Frank Lesh, a broker with Future Path Trading in Chicago.

�One of the main reasons gold came off $1,550 is because Greece didn�t default,� he said. �But Greece is still simmering at the moment,� and that supports the gold price. Over in the U.S., political squabbling over raising the $14.3 trillion debt ceiling continues. �However, it is likely to be resolved as the massive liabilities incurred (not including unfunded liabilities of over $60 trillion) simply cannot be paid back,� said analysts at GoldCore in a morning note. "It is therefore likely that more debt monetization (creating money to buy government bonds) will occur, leading to further currency debasement and the risk of stagflation and severe inflation.� See full story.