Gold matches record winning run on US

Gold eked out a tenth straight gain on Friday, matching a record winning streak set four decades ago, as some began to seek a hedge against the growing threat of a catastrophic US government default.

A rally that ignited two weeks ago when euro zone debt fears revived has extended its run into record territory this week as President Barack Obama and Republicans traded demands for a serious deficit plan, deepening a stalemate in negotiations to raise the US debt limit before Aug. 2.

Gains in crude oil, a plunge in US consumer confidence and concerns about euro zone debt contagion also helped the metal to its largest two-week gain in over two years, rising more than 7% since the start of July.

"The longer the debt talk drags on, the more you would want to own a safe haven like gold. The crude oil market is also rallying quite nicely, and that's a big element in support for gold," said James Steel, chief commodity analyst at HSBC.

Spot gold was up 0.3% at USD 1,591.50 an ounce by 3:10 p.m. EDT (1910 GMT). It failed to hit a new peak after rallying to all-time highs in the previous two sessions, but stayed near the record of USD 1,594.16 hit on Thursday.

Obama warns US default would increase interest rates

President Barack Obama and Republicans traded demands for a serious deficit plan on Friday, underscoring the lack of progress and acrimony plaguing negotiations to avert a looming US government default.

Obama used a White House news conference to keep the pressure on leaders of Congress to produce a framework for a deficit-reduction plan that will head off a default on August 2.

Five rounds of White House talks this week produced no agreement and much partisan bickering. The talks may resume over the weekend.

"Show me a plan in terms of what you're doing in terms of debt and deficit reduction. If they show me a serious plan I'm ready to move even if it requires me to make some tough decisions," Obama said."

House of Representatives Speaker John Boehner, the top US Republican, said Obama and Democrats had still not put a serious deficit plan on the table.

"They've been unwilling to put a real plan on the table. Without serious spending cuts ... this problem is not going to be solved," Boehner said after a meeting of House Republicans.

Eight banks fail European stress tests

Eight banks, including two Greek banks, five Spanish and one Austrian bank have failed the European Banking Authority's (EBA) stress tests, the agency said on Friday.

All of the Dutch, British, French, Italian, German and Portuguese banks passed the tests, however several institutions in the latter two countries, as well as several Spanish banks passed, only did so by a small margin, the EBA said. All 10 participating Nordic banks passed.

The Bank of Italy said that all five of the country's banks passed by a large margin.

Two German banks, one Slovenian bank, two Greek banks, two Portuguese banks and one Cypriot bank came close to failure, the EBA said.

Overall, 16 banks had tier one capital of between 5 and 6 percent, according to the EBA.

One kg explosive used in Opera House blast

 Even as Mumbai awaits the arrival of Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi, investigations are going on a war-footing on a rainy Thursday with different teams finally beginning to decode the prima facie evidence that led to three blasts in Mumbai on Wednesday evening killing 18 people and injuring 131.

In a PIB release available on its website, the Home Ministry mentioned that the timer devices used to trigger ammonium nitrate-based explosives were sophisticated even as different quatities were used for separate locations.  According to the release, in the Kabutarkhana Dadar West blast, the low intensity IED, which was reportedly placed on top of a bus shelter, injured 10 people.

Finance Minister Pranab Mukehrjee. Reuters

The devices in the other two sites were powerful enough to cause more destruction. The IED at Opera House was planted below a loose slab and concealed under garbage with a  handcart/foodcart on top, the release said.  This blast killed 11 people and injured 73 . The Zaveri Bazaar explosive that claimed six lives and injured 50, was placed near a motorcycle and concealed under an umbrella.

“Almost 1 kg of ammonium nitrate was used to carry out the blast in Opera House, 400-600 grams were used at Zaveri Bazaar and 200 gm in Dadar,” Union Home Secretary RK Singh told reporters in New Delhi.

Finance Minister Pranab Mukherjee condemned the attack in the strongest possible words and called it “cowardly”. External Affairs Minister SM Krishna while condemning the attack confirmed that the India-Pakistan talks would continue as per schedule.

The investigation is being conducted by the Crime Branch and Anti-Terrorist Squad of Mumbai Police with techical assistance from National Investigation Agency, National Security Guards and teams from the Central Forensic Science Laboratories.

UBS to axe 5000 jobs

UBS is planning to cut around 5,000 jobs and save 1 billion Swiss francs (USD 1.20 billion) to counteract weak equity markets and an unfavourable exchange rate, a Swiss newspaper said on Thursday, citing unnamed bank insiders.

The precise outline of the cost-cutting programme still needs to be settled on and approved by the board, the Tages-Anzeiger said, adding the bank would announce its plans in conjunction with its second-quarter results on July 26.

UBS could not immediately be reached for comment.

Sluggish stock markets, high costs linked to the strong Swiss franc, a costly expansion in Asia and higher fixed salaries were the main reasons for the need to boost savings, the paper said.

The strong franc, which has repeatedly touched records against both the euro and the dollar in the past six months as investors fret about debts in the euro zone and the United States, has prompted many Swiss companies to warn their margins are suffering.

Earlier this week the Tages-Anzeiger said thousands of jobs were threatened at UBS and rival Credit Suisse.