The yellow metal more expensive than platinum!
Gold surged today extending the huge gains recorded in the past two sessions, to set a new record at $1772.25 per ounce, affected by the high level of volatility and fluctuations that dominate the market after Standard & Poor's downgraded the U.S. top credit rating.
Fears prevail in the market regarding the world's largest economy, ahead of the Federal Open Market Committee's decision today. Expectations that the Fed's will strengthen the stimulus as growth loses the positive momentum and rising debt woes are seen to force the fed to provide a third round of quantitative easing in order to support growth in light of recession concerns.
The European debt crisis wasn't solved yet as many thought; however, fears and jitters were eased after the European lawmakers reached to an agreement to support the suffering countries, as Greece was bailed out for the second time and also took more measure to shelter other nation but this wasn't sufficient to convince investors that the debt crisis will not expand into another major countries within the zone.
Italy and Spain are highly exposed to the crisis, which led the European Central Bank to start the Bond purchasing program in risky attempts to ease the woes and to put an end to the debt crisis in the zone. The European debt crisis in addition to the U.S. credit rating downgrade and expectations that Federal bank will provide third round of quantitative easing raised fears in the market and led the heavy wave of pessimism and volatility, while the shiny metal gained the most as investors hold more and demand for gold increased as a safe haven.
Spot gold surged today after the opening in the Asian session at $1719.25 per ounce, to set a new historical record at $1772.25. The metal also recorded the low of $1715.12 and is currently trading around $1750.77 an ounce.
The shiny metal continues the upside journey as we expected before amid the downbeat global growth outlook, after the data released in the world's major economies reflected the slower pace of growth in different sectors, while major central banks around the world are keeping low interest rates in order to provide further stimulus to growth; however, inflation threats and concerns are rising in regards to another phase of recession.
Today, heavy fluctuations and volatility are expected to dominate the market, especially when investors have no confidence after the heavy losses seen yesterday across the board, waiting for the FOMC rate decision late today.
Among other precious metals, we find that silver is fluctuating heavily for the third consecutive day; however the metal declined today after the opening of $39.000 per ounce cutting the gains recorded in the past session. The metal recorded a high of $39.500 and a low of $38.350, and is currently hovering around $38.680 an ounce.
Platinum, which became cheaper than gold, opened the session today at $1724.00 per ounce and recorded the high of $1729.00 and the low of $1717.00, and trades now around $1722.00 an ounce.