Gold, silver climb on European debt concerns

AP News
Posted: Jul 06, 2011 3:50 PM
Gold, silver climb on European debt concerns

Precious metals settled at their highest prices in two weeks Wednesday as Portugal's debt woes added to Europe's financial problems.

Gold for August delivery gained $16.50 to settle at $1,529.20 an ounce. September silver climbed 50.6 cents to settle at $35.916 an ounce. Energy and agriculture products were mixed.

Portugal's borrowing rates rose a day after Moody's downgraded that country's debt. The ratings service said Portugal may be unable to meet deficit reduction targets and could need a second rescue package. Stocks fell in many European countries, including Portugal, Spain and Italy.

European government leaders are trying to finalize a second loan package for Greece by September. Without the help Greece would be in danger of defaulting on its debt, which would disrupt global financial markets.

Gold and silver are seen as stable stores of value. Many investors buy them when they're concerned about instability in other markets.

Other commodities were mixed after China imposed its third interest rate hike this year in an effort to curb inflation. The increase came ahead of a report on June inflation next week.

A stronger dollar also weighed on commodities prices. Commodities are priced in dollars, so a stronger dollar makes them more expensive for investors who trade in other currencies.

Copper for September delivery fell 1.25 cents to settle at $4.335 a pound. October platinum lost $8.70 to settle at $1,733.40 an ounce and September palladium dropped $2.45 to $773.20 an ounce.

Benchmark crude for August delivery fell 24 cents to settle at $96.65 per barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil rose 0.67 cent to settle at $2.9633 per gallon, gasoline rose 2.02 cents to $2.9976 per gallon and natural gas fell 14.9 cents to $4.222 per 1,000 cubic feet.

Wheat for September delivery dropped 8.5 cents to settle at $6.27 a bushel, December corn fell 4 cents to $6.085 a bushel and November soybeans rose 0.5 cent to $13.185 a bushel.