Gold futures are set to notch monthly highs as prompted by the political impasse in Washington over how to increase the debt ceiling, Bloomberg reports.
For the first month in the past three, the precious metal is slated to increase. On Wednesday, gold futures set record highs of $1,628.05 per troy ounce. Moody's Investors Service indicated a credit rating reduction might be in line for Spain, one of the core euro zone nations to suffer from the sovereign debt crisis hobbling banks and public finance systems.
"While I'm still medium- and long-term bullish, I maintain that gold has rallied too far, too fast," states an email from investor Jim Pogoda, formerly a precious-metals trader for Mitsubishi International. "I can't imagine that U.S. will default, or get downgraded, and that the risk premium associated with it in the price at the moment will come out in coming days."
At 5:55 a.m. on Friday, gold futures were up 0.14 percent, a 42.30 increase to $1,618.50 per troy ounce.
Reuters reports President Barack Obama warned the nation will not be able to cover bills on August 2 should Democrats and Republicans fail to negotiate a pact as jittery investors watch closely.
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