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Gold Surges Past $1,700 As S&P Downgrades US Debt

The price of gold advanced to a fresh record peak above $1,700 Monday morning as investors shun riskier assets amid global growth jitters.

Rating agency Standard & Poor's on late Friday downgraded U.S. sovereign credit rating by one notch to 'AA+' from 'AAA' with a negative outlook

Gold for December delivery, the most actively traded contract, gained $58 to $1,709.80 an ounce. Last week, gold advanced to a fresh record intraday peak of $1,685 amid safe haven appeal.

Earlier today, Goldman Sachs raised its gold price forecasts, citing the fall in U.S. real rates and intensifying sovereign debt issues in both sides of the Atlantic. The investment bank raised its three-month gold price forecast to $1,645 per ounce from $1,565 per ounce. It also upped its six-month and 12-month forecasts to $1,730 per ounce and $1,860 per ounce, respectively.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,286.30 tons.

Meanwhile, the U.S. dollar was moving higher against the euro, sterling and the Swiss franc Japanese, while ticking lower against the yen.

In economic news, the euro zone investor confidence deteriorated notably in August after improving in July, according to a leading survey. The sentix investor sentiment index, an indicator of confidence around 900 investors, fell to minus 13.5 from 5.3 points in July. Economists had expected the index to fall to just 4 points.

Elsewhere, the prices of silver and platinum moved up in morning deals.

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