Tuesday, 5 Oct 2010

Gold Futures at Record High

The Dollar fell to a six-month low against the euro and lost ground against the Japanese yen Tuesday as expectations increased the Federal Reserve will follow in the BOJ's footsteps and announce further monetary easing programs.

The euro jumped to $1.3852, up from $1.3686 late Monday, and reached an intraday high of $1.3859 — the highest level in more than six months. The single currency extended gains after European and British manufacturing data showed better than expected results.

Speculations of further intervention by the Fed helped push Gold prices to record highs. The most-active gold futures contract settled above $1,340 for the first time as investors turned to the commodity as an alternative store of value. Investors tend to turn to the metal in times of inflationary uncertainty.

The weak Dollar also boosted Oil prices to a five month high. Light, sweet crude oil for November delivery on the New York Mercantile Exchange settled at $82.82 a barrel, the highest level since May 4. A weak Dollar makes the commodity cheaper to buy as it is dollar denominated.