Forexpros — Gold futures extended gains on Monday, climbing above the psychologically important USD1,600-an-ounce level, while silver prices advanced to a ten-week high.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,601.35 a troy ounce during European morning trade, gaining 0.46%.                

It earlier rose as much as 0.55% to trade at a record high USD1,602.35 a troy ounce.

Gold prices advanced for the 11th consecutive day, its longest stretch of gains since August 1970. Euro-denominated gold prices extended gains to hit a fresh record high of EUR1,141.40 a troy ounce.

Gold prices also hit record highs in sterling, South African rand and Canadian dollar terms.

Italian and Spanish government bond yields came under pressure on Monday, with Italian bonds climbing to 5.85%, while Spanish yields rose to a euro-lifetime high of 6.31%, approaching the 7% mark that prompted peripheral euro zone nations, Greece, Portugal and Ireland to seek bailouts.

Euro zone finance ministers were to meet Thursday to focus on “the financial stability of the euro area as a whole and the future financing of the Greek program,” according to the president of the European Council, Herman Van Rompuy.

The second summit in less than a month follows a worsening of the crisis that pushed Italy to the attention of investors and drove bond yields to euro-lifetime highs across Europe’s most indebted nations.

Meanwhile, U.S. President Barack Obama said over the weekend that the U.S. government was “running out of time” in regards to negotiations over lifting the country’s USD14.3 trillion debt ceiling before an August 2 deadline.

Ratings agencies Moody’s and Standard & Poor’s both warned last week that a failure to raise the debt limit in time would result in a downgrade in the credit rating of the world’s largest economy.

Gold is often seen as an alternative currency in times of global economic uncertainty.

Elsewhere, silver for September delivery rallied 2.3% to trade at a ten-week high of USD40.21 a troy ounce.

Silver prices have rallied nearly 14% in July as investors sought a cheaper alternative to gold.