Forexpros - Gold futures rallied to a record high for the second consecutive day on Wednesday, as mounting fears over the U.S. economic recovery and lingering worries about a possible downgrade of the U.S. sovereign debt rating boosted demand for safe haven assets.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,672.85 a troy ounce during late Asian trade, climbing 0.9%.
It earlier rose as much as 0.97% to trade at a record high of USD1,674.15 a troy ounce, eclipsing the previous high of USD1667.65 a troy ounce it hit in the previous session.
Gold prices have climbed to record highs in nine of the past 16 sessions.
Data on Tuesday showed that U.S. personal income rose by 0.1% in June, the smallest gain since last November, while personal spending unexpectedly dropped 0.2%, the first decline in nearly two years, adding to concerns over the U.S. economic recovery.
Meanwhile, the U.S. Senate approved a bill to raise the U.S. debt ceiling by at least USD2.1 trillion on Tuesday, averting a default.
Ratings agency Moody's affirmed its AAA credit rating for the U.S., but warned that it may be downgraded on concerns that fiscal discipline will ease, further debt reduction measures won't be adopted and the economy will weaken.
Fitch Ratings called the deal "a step in the right direction," but added that it could still place a negative outlook on the country's credit rating.
Gold prices found further support after Italian and Spanish bond yields surged to euro-lifetime highs on Tuesday, 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 third consecutive day, climbing to EUR1,180.25 a troy ounce.
Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.
Elsewhere on the Comex, silver for September delivery rose 0.95% to trade at USD41.13 a troy ounce, hovering close to a 13-week high as investors sought a cheaper alternative to gold.