Gold prices top record $1,600

July 18, 2011: 2:00 PM ET
Gold prices

Click on chart for more gold prices

NEW YORK (CNNMoney) -- Gold prices broke a new record Monday, topping $1,600 an ounce, driven by concerns over mounting debt in the United States and Europe.

Gold futures for August delivery settled at a new high of $1,602.40 per ounce. Earlier in the session, gold touched a fresh intraday high of $1,607.90 per ounce.

The buying was also helping lift shares of gold ETFs, with Market Vectors ETF Trust (GDX), SPDR Gold Trust (GLD) and Pro Shares Ultra Gold (UGL) moving about 1% higher.

The yellow metal has been on a roll since July 12, when it got an extra boost from the minutes of the Federal Reserve's June policy meeting. They indicated that the central bank could be open to more monetary stimulus.

Further stimulus could undermine the U.S. dollar, triggering a flight to gold, the age-old stalwart in troubled times, when investors are afraid to put their money elsewhere.

"I think people are coming to realize that the economy is weakening again and the government might see a need to try to stimulate the economy further," said Joe Foster, portfolio manager for the Van Eck Global International Investors Gold Fund (INIVX).

Gold has also been lifted by concerns over European debt, especially from the fiscally hamstrung nations of Ireland and Greece.

"Greece is sort of on the verge of default and they're still trying to figure out how to engineer a recovery for Greece without inflicting a default on the country [and] the markets are sensing that's almost impossible," said Foster. "Until the situation is resolved in these peripheral countries, it's going to drive gold."

Jono Remington-Hobbs, precious metals analyst for FastMarkets Ltd. in London, said that gold investors will be closely watching the European Union's economic summit scheduled for Tuesday.

"European leaders have been kicking the can down the road for so long they don't realize that they've walked into a cul de sac," he said.

Market does the safety dance

Remington-Hobbs also said that gold prices could be heavily influenced this week by what Federal Reserve Chairman Ben Bernanke says when he speaks Thursday about financial regulation.

Silver was taking its cues from gold, with prices breaking the $40-an-ounce mark for the first time since May 4. Silver for September delivery rose more than 3% Monday to settle at $40.34 per ounce. But that's still short of its April 25 record of $49.81, noted Remington-Hobbs.

Gold is also still far from its true peak, when adjusted for inflation. Gold hit its real record on Jan. 21, 1980, when it rose to $825.50 an ounce. Adjusted for inflation from 1980 dollars to 2011, that translates to an all-time record of $2,261.33 an ounce. To top of page

Index Last Change % Change
Dow 17,082.75 3.18 0.02%
Nasdaq 4,573.30 15.60 0.34%
S&P 500 2,000.88 4.14 0.21%
Treasuries 2.34 0.00 0.17%
Data as of 12:51pm ET
Company Price Change % Change
Bank of America Corp... 16.09 0.08 0.51%
Apple Inc 102.48 0.23 0.22%
Intel Corp 34.86 0.21 0.61%
Facebook Inc 74.71 0.85 1.16%
Kinder Morgan Inc 40.16 0.39 0.98%
Data as of 12:36pm ET
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.06%4.28%
15 yr fixed3.17%3.24%
5/1 ARM3.52%3.41%
30 yr refi4.04%4.19%
15 yr refi3.15%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.