Precious Metal's Continuous Surge Helps Gold Record Historical Prices!

Yesterday's precious metal surge did not stop; where traders continued demanding them, specifically gold, after news spread about India purchasing 200 metric tons of gold from the international monetary fund. This purchasing process is not behind the spike gold is witnessing in financial markets, but it is occurring through preferential rates or real-time prices; where it equals purchase and demand, thus keeping the equation intact. However, this news managed to lure traders towards the traditional gold, thinking that gold will rise in the future due to India needing gold reserves and thus causing huge demand, which had pushed gold to surge once again; achieving its highest at $1099.00 per ounce before closing at 1091.90 in New York, with a rise by 0.70%.

Gold wasn't the only metal that had witnessed a rise; silver closed by appreciating 1.34% at $17.44; whereas platinum followed and closed at 1365.00 gaining 0.59%. Meanwhile, the dollar fell yesterday against a basket of foreign currencies, where crude rose to $80 once again. These factors contributed to the surge of precious metals, pushing traders to these markets.

Commodity indices also slightly gained yesterday; the S&P GSCI index closed at 513.36 rising by 3.11 points and inching closer to 528.43, which is considered to be the same level achieved last month, the highest seen over a year. Yesterdays spike seen in precious metal markets could be caused by numerous reasons, where we can conclude and say that precious metals have been witnessing investment and speculation demand in markets, in addition to being demanded as a safe haven - specifically gold - incase of the uncertainty currently overshadowing global financial markets.

On the other hand, we witness a correctional wave overshadowing precious metal markets; where gold fell 0.52% at 1086.20, precisely at 02:44 EST; meanwhile silver is trading at 17.26 depreciating 1.03%; whereas platinum also fell by 1.03% to trade at 1351.00.

The correctional wave precious metals witnessed will not halt the bullish medium term direction for gold specifically. Meanwhile, the report still points to gold continuing to rise above $1100.00 to probably reach $1300.00 per ounce on the long term. However, the fed's yesterday stated that returning to grow again does not entirely mean that it would raise interest rates; thus, supporting the weak dollar's continuity and the need of a safe haven against low exchange rates. Despite of the improvement global economies have witnessed, they are not considered completely stable till this moment, since global economies have not been able to dispense of stimulus plans and extremely low interest rates.

The fed's managed to tie the raising of the interest rate to the improvement witnessed in the job market, or the rise in inflation levels. All these changes back up the very low interest rate's continuation, even though these facts still point to a very weak American economy, which continues to pull in investors to take up gold as a safe haven.

Today, we await the interest rate decision from both the European Central Bank and the Bank of Britain, where these decisions might correlate with vital statements that might cause major fluctuations in financial markets; thus, causing precious metal prices to fluctuate in a volatile way.