Monday, 23 Nov 2009

Gold Surges to Record Highs

The EUR and other higher yielding currencies maintained their gains during Monday's trading as global stocks, Oil and Gold rallied. Demand for the greenback was hurt by earlier comments from a Federal Reserve official. In an interview Sunday, Federal Reserve Bank of St. Louis President James Bullard said he would prefer the central bank to extend its purchases of mortgage-backed securities beyond March to give policy makers more flexibility in directing the economy toward recovery. The statement added to concern the market is being flooded with greenbacks, putting pressure on the currency.

The EUR today neared the key $1.50 level, receiving a lift from better than expected euro-zone data and comments from the central bank about regarding the impending removal of the fiscal stimulus. Pressure on the Dollar was also seen following a report that showed U.S. existing-home sales jumped 10.1% in October.

Gold surged to record highs Monday, hitting a new high of $1,174 an ounce on the Comex division of the New York Mercantile Exchange. Currently Gold is trading near the $1,165 level. Gold tends to move in the opposite direction of the Dollar as investors seek insurance against rising inflationary risks.