The gold prices have made new record levels under the influence of the weaker U.S. dollar and continuing tensions in the Middle East and North Africa. The gold for immediate delivery rose to a record 517.98 dollars an ounce during the trading session in Asia today, before its price to retreat back to 1517 dollars. The acceleration of inflation in the world in recent months has made investors look for precious metals as an alternative to paper currencies. The geopolitical turmoil in Arab countries in recent days also increased the interest in gold and silver. According to market analysts interviewed by the BBC, gold prices will probably go beyond 1520 dollars an ounce in the coming days. Today’s session was the seventh in a row in which the gold price sets a new record. The depreciation of the dollar this year is a major factor pushing up gold prices. Dollar grants for a fifth day against the euro and at 11:50 GMT the pair EUR / USD is quoted at around 1.46 dollars per euro. Since the beginning of today’s session, U.S. currency cheaper money by 0.3 percent against the euro, and earlier today they rate against the Australian dollar fell to a record low of $ 1.0774 per Australian. The Federal Reserve Chairman Ben Bernanke is expected to confirm the commitment of the U.S. central bank to maintain its zero interest rates on Wednesday this week. Moreover, foreign analysts believe that the Federal Reserve will implement fully its second cash injection of $ 600 billion.
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The Gold-currency reserves of South Korea rose to new record levels in March, surpassing its dollar equivalent of the previous two months. The main buffer in the country against possible financial turmoil lasting approaching $ 300 billion. In March, the dollar value of official gold-currency reserves amounted to 298.62 billion dollars. This is 950 million dollars more than the previous record of 297.67 billion set in February. South Korea’s reserves fell to just over $ 200 billion in November 2008 when the central bank is using some of them to combat the shortage of liquidity when credit dried up during the global financial crisis. Since then, however, foreign exchange reserves of South Korea are rising steadily. Foreign exchange reserves are a key instrument of economic and monetary policy to protect the currency from speculative attacks, while can be used to provide liquidity and strengthening the financial system. The central bank of South Korea indicate that the appreciation of the euro and other currencies in their reserve currency causes an increase in dollar equivalent of the reserves. The South Korean government sees its reserves a key tool for protection against financial instability. The Asian country is particularly sensitive after the Asian financial crisis of 1997-98, when received to be considered as degrading of the public international rescue.
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The crude oil prices rose sharply to their highest levels since 2008, and gold continued to become more expensive for the sixth straight day, going over 1400 dollars an ounce for the first time in seven weeks. The occasion is the expansion of civil unrest in the Middle East and North Africa. Escalating violence in the third-largest oil producer in Africa – Libya made several major oil companies to suspend their operations in the country and to evacuate their foreign staff. The shares in European and Asian companies operating in the Middle East, fell heavily in today’s session. Stock markets in the U.S. will be closed for national holiday. U.S. light crude for delivery in April, rising by 4.2 percent to 93.49 dollars a barrel in electronic trading on the New York Petroleum Exchange today. Brent crude, meanwhile, dealt with an increase of 2.4% to nearly 105 dollars a barrel, its highest price level for the past two years. The gold, meanwhile, rising by 1% to 401.60 dollars an ounce as investors sought refuge in it against the backdrop of political uncertainty in the Middle East and North Africa. Earlier today the price of gold for delivery in April jumped to 1,404 dollars an ounce. The silver hand rose to 33.5175 dollars per ounce, exceed 33 dollars for first time in 30 years.
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The gold has appreciated by 24% this year and is about to celebrate its tenth consecutive year of growth because of increased interest of investors to it as an alternative to paper money and means of protection against inflation. The strong jump in price in recent years does not seem to interfere with speculators like George Soros and John Paulson, who actively increased their investment in gold. Gold occupies the largest share in investment funds managed by them Soros Fund Management and Paulson & Co. at the end of the third quarter. The exchange traded funds that bet on gold, have 2088 metric tons of gold which is approximately equal to its extraction from the mines in the U.S. for nine years. According to investment firm BlackRock is more official gold reserves of any country except the U.S., Germany, Italy and France. Meanwhile, Goldman Sachs forecast that the precious metals will be the most profitable assets next year. The rapid increase in gold prices over the past three years undertaken since governments and central banks worldwide, led by the U.S. Federal Reserve, money supply grew strongly in their efforts to cope with severe financial crisis. Significantly, gold has appreciated by 87% since September 2007 when the Fed started lowering interest rates and financial markets have begun to feel the effects of mortgage crisis. The broad U.S. stock index S & P 500 in the standing with 21% below their levels of September 2007. According to analysts of Euro Pacific Capital, which successfully predicted the gold price records in the last two years, its rapid appreciation will end when real interest rates become positive. They point out that instead the Fed print more money to stop the rise in real interest rates and stimulate the economy.
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The price of oil dropped to its lowest level in over six weeks since the news that the government investment fund Dubai World in Dubai has requested postponement of payments on obligations, which exceed $ 59 billion. The decline in the value of the raw material was also supported by increased oil stocks in the U.S., indicating weak demand from consumers and industry. U.S. light crude for January delivery fell by $ 3.44, or 4.4 percent to 74.52 dollars per barrel in late Asian trade. For the last oil is sad at this level on October 14. Since the beginning of the week the raw material decreased from 2.8%. The dollar, which was one of the few winners from stall stock prices of raw materials and upload their values to levels of 1.4920 EUR / USD against 1.5019 EUR / USD yesterday. Rally index MSCI Asia Pacific, which monitors presentation of shares in the Asia-Pacific region fell by 3% to 114.08 points in Tokyo. This was his most potent decrease from August. Quotes of the indexes S & P and Dow Jones Euro STOXX 50 is accordingly decreased by 3.2% and 1.7%. Main DAX index of the Frankfurt Stock Exchange fell by 0.60 percent this morning after yesterday sank more than 3% Index CAC 40 of the Paris Stock Exchange lost 1.79 percent targets yesterday after a decline of 3.41% London FTSE-100 fell by 0.80%
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The price of gold fell by more than 4 percent on the London Metal Exchange today after the appreciation of the dollar reduced the attractiveness of the precious metal as an alternative investment. Dollar increase after the news about the financial difficulties of the Dubai government investment fund Dubai World, which reinforced fears in financial markets. Dollar Index, which monitors the rate of the dollar against a basket of six major currencies, rose by 1 percent today, after earlier this week dropped to their lowest level in 15 months. As a result, prices of all precious metals fell, led by silver. Gold with immediate delivery fell to 50.28 dollars, or 4.2 percent, to 1 138.10 dollars an ounce. This is the strongest decline in the price from 12 January to date. The February gold futures cheaper by 2.1% to 1 163.60 dollars an ounce in electronic trading at the stock exchange in New York. Thursday marked the third straight gold price record only within the last week. Compared to last Friday the price of gold has risen by 1,1 percent. Precious metals will probably noted fourth consecutive weekly increase. Consulting firm Standard Chartered Plc today released a report which shows that central banks are likely to be net buyers of gold this year, which never happened in the past two decades. This week it became clear that Sri Lanka has purchased 10 metric tons of gold from the International Monetary Fund for 375 million dollars. Previously, India and the island countries of Mauritius, respectively, purchased 200 tons of gold reserves of the fund against 6.7 billion dollars and 10 tons of gold to 71.1 million.
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