26 Jul 2011

Gold hits new high as US debt talks deadlocked

1:45 pm on 26 July 2011

The price of gold rose to new record highs above $US1620 an ounce as concerns grow about the delay in the US Congress agreeing a new debt ceiling.

Little more than a week remains before the 2 August deadline to raise the $US14.3 trillion debt ceiling.

President Obama's Democrats and their Republican rivals are pursuing separate budget proposals in the US Congress, with no clear path to bring them together.

The debt crisis in the eurozone has also helped drive up the price of the precious metal in recent weeks.

After hitting new highs, the gold price slipped back to just over $US1611 an ounce. Gold is seen as a safe investment and often rises in times of uncertainty.

On Wall Street, the Dow Jones industrial average closed down 88.36 points (0.7%) at 12,592.80.

The Nasdaq Composite Index slid 16.03 points (0.56%) at 2,842.80.

Across the Tasman, the Australian 200 Index closed down 72 points (1.5%) on Monday to 4530.

The NZX 50 closed down 21 points (0.6%) to 3428

On Tuesday morning, the New Zealand dollar was trading at US86.64 cents, 79.72 Australian, 53.14 pence, 67.8 yen and 0.6021 euro. The TWI stood at 74.04.