GOLD SOARS AND WILL SOAR AGAIN "TOMMOROW"
wednesday 06-06-2012, 11.45pm
Today on Wednesday gold futures has surging to a four-week high of
USD1,621.95 a troy ounce rose by 0.32%. It earlier rose by as much as 1.4% to
trade at USD1,642.15 a troy ounce, the highest since May 7. Investors hung
on to hopes for action by global central banks and other authorities to
stimulate growth and boost the world economy, boosting the appeal of the
precious metal.
There
are more reasons of what we have seen, a simple cause and effect relationship
leading gold to its peak. Today on Wednesday after the news came from that
European Central Bank kept rates unchanged and pledged to extend some of its
liquidity providing operations. Gold seems to move upside and roses to its one
month high of usd 1642.15 a troy. To find an cause and effect relationship here
is interesting.
As
we know that Greece crisis as well as a half build spain one keep creating
problems for ECB and other global banks. So at this point of time they have
left with two options either decrease the interest rate or to give more
liquidity providing operations. As discuss in meeting that they will wait for
the results of election to have a look on the position of Greece in euro zone
and other economic concerns then they will try to give their support. So as
they said European Central Bank kept rates unchanged and pledged to
extend some of its liquidity providing operations.
Draghi also said that main refinancing operations will continue to be
conducted for as long as necessary, extending the operations until the end of
the January 15, 2013.
Which
clearly give an indication that if more money will come to market it will
certainly affect the value of euro as a currency as well as it will bring more
inflation in country. so as a smart investor people are not interested in
investing in currency or in government bond or in fixed income low interest
rates securities or equities as it seems to loss its value. And an ultimate
option left with investor is gold.To see the chart of gold price click here
http://www.forexpros.com/commodities/gold-streaming-chart
http://www.forexpros.com/commodities/gold-streaming-chart
Investors
hung on to hopes for action by global central banks and other authorities to
stimulate growth and boost the world economy, boosting the appeal of the
precious metal. Gold prices have rallied on past monetary stimulus measures.
Investors tend to have faith on the yellow metal on fears that excess
liquidity would put a damper on the value of paper currencies and spark
inflation. The precious metal is widely considered a hedge against inflation
and a store of value.
This
is what we have seen today but tomorrow also we can see the same rally in gold
prices-
Because
Gold traders were now shifting their attention to a Congressional testimony by
Federal Reserve Chairman Ben Bernanke on Thursday about the state of the U.S.
economy. Gold traders will be looking for clues as to the likelihood of a fresh
round of monetary easing, which could potentially hurt the U.S. dollar and
support gold. The Wall Street Journal, citing interviews and Fed speeches,
reported late Tuesday that the U.S. central bank want to take new measures to
stimulate growth in the world’s largest economy. QE has been a key driver in
gold’s bull run, as I said earlier that if QE3 will be there means more money
supply and dollar will certainly loss its value and it also bring more
inflation. As it keeps interest rates and borrowing costs low, which makes gold
more attractive compared with yield- or dividend-bearing assets such as bonds
or stocks. So we can see an upside move of gold tomorrow.
