Gold trades near its historical record as demand for the haven increases
Gold inclined today after the opening in the Asian session, extending the gains recorded in the past session and trading near its historical record as demand for haven increased after the downbeat growth outlook spread jitters and fears among investors regarding another recession, while Switzerland and Japan intervened in order to stimulate growth and stem the cunnrecy rally, in addition, the European Central Bank and Bank of England are expected to also keep interest rates unchanged in an attempt to support economic growth, which confirms that the global economy is slowing and getting closer to contraction.
Spot gold retreated yesterday after setting a new historical record at $1672.85 per ounce, to open in the Asian session today at $1661.90; however, the metal is stable at high levels and is currently trading around $1665.32, after recording the high of $1669.10 and the low of $1657.60 per ounce.
The shiny metal was affected by the debt crisis in Europe in addition to the debt-ceiling debate in the U.S., which increased demand for gold as a safe haven and forced the metal to trade higher and to begin a long upside journey setting new historical records; however, the debt crisis was softened after the European leaders have reached an agreement and voted to bailout Greece for the second time to prevent the debt crisis from expanding to other major economies within the union, but in fact, the leaders seem to fail, as increasing Italian bond yields raised concerns that Italy could be the next victim of the debt-crisis. But, the Italian Prime Minister, Silvio Berlusconi, has responded to the fears that are dominant in the market saying that Italy has the second solid economy within the zone and its banks are liquid and passed the stress test. If this was confirmed -Italy to be the next victim of the debt crisis- gold may extend the upside journey further and could set a new historical record above the $1700 level.
Moreover, the shiny metal is held in the current time by investors amid rising concerns of another recession, after the downbeat growth data, which reflected a slowing pace of growth in the world's major economies, as U.S. reported slowing growth in the manufacturing and services sectors alongside with lower gross domestic product index the last quarter.
For Switzerland and Japan, both of the countries have unexpectedly eased their monetary policy in order to stimulate the economy and support the pace of growth, after the European debt crisis and the U.S. debt ceiling have affected the global economy in a negative way.
Among other precious metals, we can see silver is trading within narrow levels today, after recording gains in the past two sessions, where the lack of confidence has extended further among investors in the market, pushing the speculative forces to avert holding risky investments.
Silver is currently trading around $41.63 per ounce, after the opening of $41.67, where the metal recorded the high of $41.99 and the low of $41.47 per ounce.