Record Breaking Gold Prices
Gold surged yesterday setting a new historical high after major purchasing liquidity rushed into precious metal markets, specifically on gold, where it is considered to be a safe haven incase the global economy uncertainties, or major economies take a longer time to bounce back. Expectations are for the Feds to hold onto the low interest rate for a while, despite of recovery signs appearing in the U.S. economy; however, this recovery was not able to revive the economy or completely stabilize it, which will keep the dollar relatively low against a basket of foreign currencies; thus, pushing investors towards finding a safe haven against the depreciating dollar.
The Word Bank revised their expectations for China's GDP for this year, where new expectations took into consideration new governmental stimulus plans; thus, raising expectations for the third biggest economy in the world's overall GDP from 7.2% to 8.4%, which caused a rush towards stock markets while reducing towards precious metals today. On the other hand, those expectations did not notably reflect negatively upon precious metals, especially gold, which are still trading at the same levels since at closing in New York yesterday.
Yesterday, gold rose by 2.33% and closed at 1084.30 after recording a new record at 1089.10. India's Central Bank announced their purchases of 200 metric tons of Gold from the IMF which fueled directly the surge for the metal. Meanwhile, the major liquidity flowing into precious metal markets caused speculations on silver, raising it sharply; closing at 17.21 gaining 4.62%. Platinum also managed to advance during yesterday's trading session in New York, closing at 1357.00 with a gain of 1.56%.
The large rise silver witnessed contained a lot of private liquidity from speculators; being the reason behind profit-taking today that lowered silver by 0.17%; whereas platinum fell by 0.44% and was the most to do so till this moment, where numerous speculators gained most of their profits alongside the fact this improvement witnessed throughout industrial sectors around the globe is limited, since it couldn't reach typical levels in the previous years.
At precisely 02:27 EST; gold traded at 1084.20 today, while silver traded at 17.18, whereas platinum despite of its fall managed to still trade above $1350.00 per ounce.
As we constantly pointed out, precious metals are surging on the medium term; where gold is predicted to reach new historical levels. Meanwhile, crude returned to trade to the upside in levels above $79 per barrel; whereas commodity indices stabilized near their highest levels for over a year; the S&P GSCI index is trading at 510.25 gaining 6.62 points, according to yesterday's New York trading session. These reasons pushed many traders towards precious metals, while the dollar fell alongside the instability the global economy is facing. This keeps the upside direction valid for precious metals; where we think they will achieve new historical highs, particularly gold.