Gold prices inch higher on bailout anxiety
NEW YORK -- Gold prices edged higher Wednesday as investors fretted that lawmakers could hold up approval of a $700 billion financial bailout, a fear that boosted demand for safe-haven assets.
Other commodities traded mixed, with crude oil falling and most agriculture futures advancing.
Investors have generally welcomed the government's effort to prop up shaky financial institutions by removing billions of dollars in bad mortgages from their balance sheets, though some worry that the huge outlay of taxpayer money would ratchet up inflation.
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were on Capitol Hill for a second day Wednesday, repeating warnings that a failure to quickly approve the plan threatened to deepen the credit crisis and tilt the economy into a recession.
Congressional leaders from both parties have called for broad changes to the White House-backed proposal, including salary curbs for bank executives and measures to help homeowners facing foreclosure. The back-and-forth has rattled some investors and prompted a flight to safe havens like gold and other hard assets.
"Gold will continue to benefit from the (bailout) funding squeeze that continues to chill markets," Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said in a note.
Gold for December delivery rose $3.80 to settle at $895 an ounce on the New York Mercantile Exchange, after earlier rising as high as $907.80.
Other precious metals traded mixed. December silver rose 27 cents to settle at $13.44 an ounce on the Nymex, while December copper fell 4.55 cents to settle at $3.1065 an ounce.
In energy markets, oil prices fell below $106 a barrel as weak U.S. fuel demand and a stronger dollar outweighed concerns over a reduction in global crude output.
Light, sweet crude for November delivery fell 88 cents to settle at $105.73 a barrel on the Nymex after rising as high as $109.50 earlier in the day. On Tuesday, the contract fell $2.76 to settle at $106.61.
In agriculture trading, most grain prices rose on the Chicago Board of Trade.
Wheat for December delivery rose 12.75 cents to settle at $7.505 a bushel, while December corn added 1.75 cents to settle at $5.6025 a bushel. November soybeans slipped 18 cents to settle at $11.87 a bushel.