Investing.com – Gold prices surged more than 1% higher on Tuesday, climbing back above the psychologically important $1,200 level amid increased safe haven demand as concerns over Italy’s fiscal issues hit financial markets.
December gold futures were up 1.24% to $1,206.60 by 09:53 AM ET (13:53 GMT) on the Comex division of the New York Mercantile Exchange.
Investor concerns over Italy intensified Tuesday, after the head of the lower house’s budget committee said the country would have solved its fiscal problems with its own currency.
The comments added to a war of words with the European Union over the populist government’s budget proposal which seeks to increase spending and cut taxes, but would raise Italy’s debt and breach EU budget rules.
EU officials have warned its plan to borrow billions of extra euros to fund spending pledges could tip the bloc back into crisis, but Deputy Prime Minister Luigi Di Maio said Italy would not change its budget deficit targets.