Gold tops $1,500 an ounce on economic concerns

By Associated Press
Posted yesterday at 3:33 p.m.

Gold prices topped $1,500 an ounce Tuesday as investors looked for more stable assets because of worries about U.S. government debt, European financial problems and inflation.

Gold for June delivery settled at $1,495.10 an ounce Tuesday after hitting $1,500.50 an ounce earlier in the session. May silver rose 95.7 cents to settle at $43.913 an ounce.

The gains came a day after Standard & Poor’s Rating Service lowered its long-term outlook on U.S. government debt over concerns about the massive budget deficit, which is projected to run a record $1.5 trillion this year. The change means that S&P could lower its rating on U.S. government debt in the future. If that were to happen, the U.S. government would have to pay more to borrow money when it issues bonds.

Investors also are worried about the impact that inflation may have on the global economy. China already has taken several steps to curb inflation, which could slow its economic growth. Europe, meanwhile, is dealing with financial issues in a number of countries, including Portugal.

“I think it’s going to be more in the forefront…of investors’ minds here going forward,” LaSalle Futures Group analyst Matt Zeman said. “The bottom line is the going looks good for precious metals going forward.”

Most commodities also benefited from a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them more of a bargain for buyers using other currencies.

In other metals trading, May copper rose 3.15 cents to settle at $4.2295 a pound, July platinum fell $11.50 to $1,771.30 an ounce and June palladium dropped $8 to $731.10 an ounce.

In agriculture contracts, wheat prices rose after an U.S. Agriculture Department report showed 36 percent of the winter wheat crop was in good-to-excellent condition for the week ending April 17. That compared with 69 percent in the comparable week a year ago.

About 38 percent of the crop was in poor-to-very-poor condition, compared with 6 percent a year ago. The rest was in fair condition.

Unless there is improvement in next week’s report, “the likelihood of the damage already being done is very, very high at this point,” Global Commodity Analytics & Consulting LLC President Mike Zuzolo said.

In May contracts, wheat rose 10.75 cents to settle at $7.8575 a bushel, corn fell 2.75 cents to $7.49 a bushel and soybeans lost 2.25 cents to $13.42 a bushel.

In energy trading, benchmark crude for June delivery gained 59 cents to settle at $108.28 per barrel on the New York Mercantile Exchange.

In Nymex trading for May contracts, heating oil gave up 2.43 cents to settle at $3.1585 per gallon, gasoline futures fell 1.97 cents to $3.2331 per gallon and natural gas rose 12.4 cents to settle at $4.262 per 1,000 cubic feet.

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