Gold advances amid downbeat growth outlook after FOMC rate decision yesterday
Gold inclined today, extending the upside journey and the gains recorded in the past sessions after setting a new record yesterday at $1779.45 an ounce, where the shiny metal is mainly affected by the downbeat growth outlook in addition to the slower pace of growth in different sectors in the world's major economies, especially after the Federal Reserve kept interest rates unchanged at a record low of 0.0%-0.25% in order to stimulus growth that is losing the positive momentum, while major banks worldwide are suffering from high inflation levels and unemployment rates along with slower pace of growth, which supported the yellow metal to trade higher as demand for safe haven surged.
Moreover, the Bank of England is to release August Inflation Report, awaiting more hints over the coming policy action from the bank amid slower pace of growth, high inflation and worsening financial stability, while investors are waiting for more steps to contain the deepening debt crisis, which is forcing more downside pressures on the U.K. economy. The shiny metal gained big time on the debt crisis in Europe, which keeps worsening and deepening, in the time investors are holding gold as a safe investment.
Spot gold advanced today after the opening in the Asian session at $1740.12 per ounce; however the metal recorded the low of $1737.31 and the high of $1766.85, and is currently trading around $1761.65 per ounce.
On August 5, Standard & Poor's rating agency, downgraded the U.S. top credit rating even after U.S. lawmakers have reached an agreement to raise the U.S. current debt ceiling of $14.3 trillion and to apply spending cuts in order to reduce the budget deficit. The agency said that $2.4 trillion in spending cuts over the coming 10 years is not sufficient and below its expected cuts of $4 trillion.
The Federal Reserve acted after the rating agency downgrade the U.S. rating in order to support confidence and waning growth, where the Bank is expected to extend the loose monetary policy until mid of 2013 as they pledged yesterday. The bank said nothing about another round of quantitative easing; however, it said that the bank is ready to use its appropriate tools in order to support the economy and the bank will also continue reinvesting maturing mortgage and treasury securities.
Investors have no confidence in the market, and the general sentiment remains pessimistic, awaiting the inflation report from the Bank of England today that will add more downbeat insight into the global economic outlook.
Silver also surged today, recovering some of the losses recorded yesterday, where after the opening of $37.530 per ounce, silver inclined to record the high of $38.880. The metal also recorded the low of $37.530, which is the opening level, and is currently hovering around $38.290 per ounce.
Among other precious metals, platinum also gained a big time after the opening of $1732.00 per ounce, recording the high of $1763.00 and the low of $1732.00 and is currently trading around $1757.00 per ounce.