Gold Creeps Up and Up As Debt Ceiling Mess Continues

Apparently the market trusts gold--not politicians

Investors trust gold more than politicians, it seems, as negotiations falter between the White House and Republicans on raising the federal debt ceiling before August 2. Gold hit a 40-year-old record as it gained value for the tenth straight session Friday, Reuters' Frank Tang reports. People are putting their money in safe havens like precious metals and crude oil, and "Analysts forecast gold would extend its rally further based on its technical outlook, and one said it could reach an outlandish $5,000 an ounce should equity markets plunge," Tang reports.

Gold prices have gained $107.50 since the first of the month, and Friday gold for August delivery finished the day at $1,590.10 an ounce. "The flight-to-quality buyers are emerging," Adam Klopfenstein, a senior strategist at Lind-Waldock in Chicago, told Bloomberg's Pham-Duy Nguyen. "People are starting to question if the U.S. economy can keep its footing," he said, and whether the Federal Reserve will have to boost the economy with another stimulus.

Even as stress tests on European banks had better-than-expected results, Dow Jones' Tatyana Shumsky reports, gold continued to rally. Silver has gained 7 percent in a week.