By David Lew A golden fire is on the air. Gold is on fire in the bullion markets across the world. And what better day for gold to hit the record on the first day of the last month of the year—December 1, 2009.
On Tuesday, gold hit $ 1199.49 per ounce. The yellow metal then tested the $1200 per ounce level—a big barrier that gold is breaking. Truly, a colourful day in the history of bullion trade in the world.
A plethora of reasons have been suggested for gold’s biggest rise to record high today. The deepening Dubai debt crisis, dampening value of dollar and fears of economic recession continuing despite some market movements are all driving investors, central banks and families to find solace in gold.
On Tuesday, gold jumped from $1,175.65 support in the Asian session to test the $1,200/oz level in the last hour. Currently, gold is trading around $1,193.00/oz, 1.20% above today's opening price action at $1,172.42.
Here is a report from
fxstreet.com on gold’s big rally:
According to the Oil N' Gold Team, gold rallies above 1,200 as market's nerve steadies: “Gold resumes uptrend after correction and the benchmark contract surges to as high as 1200.5. After UAE central bank showed support, investors' nerve steadies and realizes the real value of the yellow metal. Apart from ongoing demand from global central bankers, gold usually shines during economic or sovereign instability. As investors seek safe investment, gold should be a good choice besides USD.”
Phil Flynn, analyst at Alaron, comments that all eyes are on the Dubai side: “Dubai World rocks the financial world knocking oil and commodities out of their comfortable trading ranges at least for a day. The sneaky announcement that wanted the Dubai World fund, the country’s sovereign wealth fund, to delay by 6 months the payment on billions of dollars of its total $80 billion debt, caught the markets and holiday vacation traders off guard.
This led to the larger question as to the fall-out from this missed payment and what banks have exposure to it. The other question is whether the United Arab Emirates would step up and bail out the Dubai World fund.”
Australian Dollar ids gaining strength on Tuesday's European session Gold soared to a fresh all-time high; the pair has rallied almost 130 pips from 0.9105 session low, breaking above 0,9195 Monday's high to reach levels arpound 0.9230 at the moment of writing.
EUR/USD has rallied from session loe atrt 1.4970 right ahead of the European opening to levels past 1.5020, to reach prices right below Monday's high at 1.5085 at the moment of writing; 0.5% above the day opening price. GBP/USD has soared about 1.60 pips so far, from 1.6390 session low, reaching levels around 1.6560 at the moment of writing, approaching Monday's high at 1.6595.
