Gold Extends Rally on U.S. Debt Stalemate

CHICAGO, Jul. 27 -- Gold futures on the COMEX Division of the New York Mercantile Exchange further hiked on Tuesday, registering the third rise in a row, as the failure to achieve a deal on raising U.S. debt ceiling continued to boost safe-have demands.

The most active gold contract for August delivery climbed 4.6 U. S. dollars, or 0.3 percent, to 1,616.8 dollars per ounce.

Market analysts said that there has been little clarity regarding the debt ceiling issue for the recent days, which made investors more nervous and thus, allocate more money to gold from other assets such as stocks.

President Barack Obama and House Speaker John Boehner presented different debt-ceiling plans on Monday. The 14.3-trillion-dollars debt ceiling needs to be raised by Aug. 2 or the government is at risk to begin defaulting on its obligations.

If the United States, the largest economy in the world, defaulted on its payrolls, it could cause a global financial shockwave that would shake the world's economy, said Mike Daley, a senior gold analyst with PFGBEST Group.

However, some analysts noted that news of an agreement in the coming days would likely trigger an immediate correction in gold prices.

Silver for September delivery added 33.7 U.S. cents, or 0.8 percent, to 40.698 dollars per ounce. Platinum for October delivery gained 13.2 dollars, or 0.7 percent, to 1807.2 dollars per ounce.