Forexpros - Gold futures extended gains on Tuesday, rallying to a fresh record high as mounting concerns over the U.S. economic outlook and renewed fears over sovereign debt contagion in the euro zone boosted demand for safe haven assets.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,638.75 a troy ounce during U.S. morning trade, jumping 1.05%.
It earlier rose as much as 1.2% to trade at an all-time high of USD1,642.05 a troy ounce, eclipsing the previous high of USD1,637.50 a troy ounce it hit on July 29.
The Bureau of Economic Analysis said earlier that U.S. personal income rose by 0.1% in June, the smallest gain since last November. Personal spending unexpectedly dropped by 0.2%, the first decline in nearly two years.
Meanwhile, the U.S. House of Representatives passed a bill to raise the U.S. debt ceiling by at least USD2.1 trillion late Monday. The U.S. Senate was expected to vote in favor of the bill later in the day.
However, concerns that the deal to raise the U.S. debt ceiling would not be sufficient to prevent ratings agencies from cutting the U.S. sovereign debt rating continued to underline safe haven demand for the precious metal.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Gold prices found further support after Italian and Spanish bond yields surged to euro-lifetime highs earlier in the day, adding to fears that the region's debt crisis could spread to core economies despite the recent bailout deal for Greece.
Euro-denominated gold prices rose to a record high for the second consecutive day, climbing to EUR1,157.66 a troy ounce.
Meanwhile, South Korea's central bank said earlier that it purchased approximately 25 tonnes of the precious metal between June and July to diversify its foreign reserves despite high prices.
It was the first purchase of gold by the Bank of Korea in more than a decade, taking its total gold holdings to 39.4 tonnes.
Elsewhere on the Comex, silver for September delivery surged 2.4% to trade at USD40.26 a troy ounce, while copper for September delivery shed 0.54% to trade at USD4.383 a pound.
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