Open

Coming up

Don't miss

Replay


LATEST SHOWS

LIFESTYLES

New smart devices

Read more

BUSINESS DAILY

Valls needs to satisfy Socialists with €50bn cuts plan

Read more

MIDDLE EAST MATTERS

Spat over Iran's UN ambassador hampers thawing of relations with US

Read more

#THE 51%

The Peacemakers: Does gender really make a difference?

Read more

DEBATE

Fatah-Hamas Talks: Towards a United Palestinian Front? (part 2)

Read more

AFRICA NEWS

S. Sudanese rebels accused of ethnic slaughter in oil town

Read more

MEDIAWATCH

Fascist finger-pointing

Read more

MEDIAWATCH

Hollande carries the cross of unemployment

Read more

DEBATE

Fatah-Hamas Talks: Towards a United Palestinian Front?

Read more

  • French hostage Gilberto Rodrigues Leal has died, Islamists say

    Read more

  • Violent protests erupt in Rio de Janeiro

    Read more

  • Chelsea, Atletico draw 0-0 in first leg of Champions League semis

    Read more

  • French actress Catherine Deneuve to sell €4 million château

    Read more

  • Ukraine to relaunch offensive in the east after politican 'tortured'

    Read more

  • Echoes of 2pac and Biggie? French rap feud turns violent

    Read more

  • New French film tackles grisly anti-Semitic murder

    Read more

  • Photos link ‘little green men’ in Ukraine to Russian troops

    Read more

  • New anti-radicalisation plans aimed at fighting jihadism

    Read more

  • David Moyes sacked by Man United after just 10 months

    Read more

  • Hollande facing mounting pressure over Syrian refugees

    Read more

  • US probes new claims of chemical weapons use in Syria

    Read more

  • Islamist militants kill second Somali lawmaker in 24 hours

    Read more

  • Court orders US to release memos on drone strikes

    Read more

  • ‘I suffered mock executions,’ says freed French journalist

    Read more

  • S. Sudan rebels massacre hundreds in key town, says UN

    Read more

  • Air strikes kill scores of al Qaeda militants in Yemen

    Read more

Business

Gold prices hit record high amid stock market jitters

©

Text by News Wires

Latest update : 2011-07-18

The price of gold hit record highs on Monday as jittery investors sent stock and bond markets plunging amid fears that the eurozone and US debt crises could lead the world into another recession.

AFP - Gold soared to record highs Monday as investors sought its traditional safety, leaving stock and bond markets with losses on fears the eurozone and US debt crises combined could spark another recession.

Gold topped $1,600 dollars an ounce for the first time as nervous markets looked ahead to a make-or-break eurozone summit Thursday in hopes that this time, leaders might finally come up with a deal to stop the rot.

Negotiations meanwhile continued in Washington with just two weeks to avert a catastrophic debt default as US Treasury Secretary Timothy Geithner pointed to progress -- but also warned of the dire consequences of failure.

A US debt default "would bring the world economy... because of the critical role we play in the global economy, to the edge of recession again. And again, it's not an option we can consider," Geithner said.

In London, the benchmark FTSE 100 index of top shares lost 1.55 percent to 5,752.81 points. In Frankfurt, the DAX fell 1.55 percent to 7,107.92 points while in Paris the CAC 40 lost 2.04 percent to 3,650.71 points, its lowest point of the year.

In Italy -- seen with Spain as the next most at risk after Greece, Ireland and Portugal were bailed out -- the stockmarket slumped more than three percent and other European bourses were also badly hit. Madrid was down 1.44 percent.

The banks suffered as investors fretted over their exposure to debt-stricken eurozone countries and worry that the crisis is undercutting the economy.

European Banking Authority stress test results Friday, showing only eight out of 90 lenders failed, did little to reassure since the reviews did not include a possible sovereign debt default -- the most crucial issue for many as officials try to agree another rescue for Greece.

Kathleen Brooks at Forex.com said the markets want "Europe to sing with one voice, make decisions quickly to resolve Greece’s problems (and) show markets there is someone in control of the situation.

"Right now, none of the branches of power within the EU are doing that so investors are selling euro-based assets," Brooks said.

On the forex market, the euro fell sharply to $1.4041 from $1.4156 late Friday in New York while the dollar was firmer at 79.16 yen after 79.12 yen.

Gold closed at $1,599, up from $1,587 late Friday but off a record high of $1,607.46.

"Money continues to move out of equities and into gold as ongoing eurozone debt concerns continue to gather momentum," said ETX Capital trader Manoj Ladwa.

"While the precious metal trades up at all-time highs, European stocks are trading sharply lower as borrowing costs for sovereign debt soars."

"Investors are now adding real fears of a US default to go along with their European sovereign worries," said Spread Co analyst Ian O'Sullivan.

In New York, it was the same picture with the blue-chip Dow Jones Industrial Average slumping 1.37 percent at around 1615 GMT while the tech-heavy Nasdaq Composite tumbled 1.55 percent.

Dealers said the only hope now was strong company results but even stellar figures will not be enough without some progress on the debt impasse on both sides of the Atlantic.

"The question now is, can better-than-expected earnings supplant macro concerns as the main market driver?" said Patrick O'Hare, an analyst with Briefing.com.

"Probably not but what they will do is lay a foundation for a robust relief rally in the event a palatable deal on the debt limit can be reached and EU leaders can pacify participants with a plan that stems debt contagion concerns in the eurozone."

In Asian trade earlier Monday, markets were weaker but trade was quiet with Tokyo closed for a public holiday. Hong Kong fell 0.32 percent, Shanghai lost 0.12 percent and Sydney ended flat.

Date created : 2011-07-18

Comments

COMMENT(S)