Gold surge as US home sales plunge
U.S. existing home sales report released yesterday showed the biggest slump on record, where home sales plunged by more than 27 percent during the month of July, as the effect of governments' incentive to the housing sector wore off. Unemployment and rising foreclosures in the U.S. prevents the housing sector from fully recovering, accordingly, investors felt pessimistic, and causing equities to drop along with high yielding assets that dropped against both the Yen and the Dollar.
Investors sought safe investments and low yielding assets as speculations that the global recovery will flounder, thus the yen and the dollar appreciated against most majors as both currencies are considered a low yielding asset, while gold surged to trade near its highest level in nearly six-weeks, as investors try to preserve their wealth.
Gold slumped yesterday following Germany's growth data that witnessed the fastest expansion in nearly 20-years, but with the release of US housing data, the precious metal rebounded from a low of $1210.11 an ounce, to reach a high of $1235.40 an ounce, before sealing off trading at $1230.37 an ounce.
Gold for immediate delivery traded unchanged Wednesday, at $1230.35 an ounce, while setting a high of $1233.56 an ounce, and a low of $1228.95 an ounce.
Standard & Poor's Ratings Services downgraded Irish long-term sovereign debt credit rating by one notch, to AA-, from AA. The Dollar index, which tracks the performance of the dollar against a basket of currencies, rose on the daily reaching 83.288, compared with the opening levels of 83.234.
Silver for immediate delivery rose to trade at $18.37 an ounce, compared with the opening levels of $18.34 an ounce, where it managed to set the highest so far at $18.48 an ounce, and the lowest at $18.31 an ounce. Meanwhile, the world's most expensive metal, platinum, traded at the same opening levels, at 1510.00 an ounce. Meanwhile, Palladium inclined where the metal traded $2.0 higher, at $482.00.