Gold Prices Fall as Obama Backs "Gang of Six" on Debt Ceiling

Chris Mullen of GoldSeek.com wraps up Tuesday's action...

Gold Prices rose to a new record high of $1609.80 in Tuesday's Asian trade, before falling back off in London to as low as $1597.75 by about 9:35am EST. Gold Prices then bounced back higher in New York and ended with a loss of just 0.1%.  

The Gold Price in Euros fell to about €1130. 

Silver Prices surged to as high as $40.843 in Asia before they to fell back, hitting $39.911 by a little before 8am. The Silver Price then bounced back higher in New York and ended with a gain of 0.02%.

Both metals were falling in afterhours trade, however, in reaction to news that the so-called "Gang of 6" has “reached agreement on a major plan to cut the deficit by more than $4 trillion over the coming decade – in what could be a bold entry into a debate on the deficit long bogged-down by bitter partisanship.

A bipartisan group of US senators on Tuesday revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the nation's credit limit by August 2.

President Barack Obama threw his support behind the proposal by the "Gang of Six" senators, saying it was broadly consistent with his approach on reducing debt and deficits.

This plan looks as if it would pass the Senate, but doubts still exist about the response from the House.  Reactions are sure to be released soon.

Gold and silver equities fell as much as 2% by early afternoon and remained near that level for the rest of the day.

Platinum gained $2.50 to $1769.50, and copper gained over 6 cents to about $4.46.

Oil rose on better than expected housing data that raised demand expectations.

The US Dollar fell as the Euro rose on hopes that a solution to Greece's debt problems will be reached at an EU summit later this week.

US Treasuries rose as yields fell on easing debt worries.

The Dow, Nasdaq, and S&P rose on better than expected earnings reports and optimism that debt deals will be reached in both the US and Europe.

Among the big names making news in the market Tuesday were State Street, Coca-Cola, IBM, Goldman Sachs, Wells Fargo, Borders, Bank of America, News Corp., and Apple.

Wednesday at 10am EST brings Existing Home Sales for June expected at 4,930,000.

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