Gold soars today

Published April 26th, 2012 - 12:31 GMT
The yellow metal is currently trading around $1,652.15, near the day's high
The yellow metal is currently trading around $1,652.15, near the day's high

Gold rose on Thursday trading after the Fed had referred to possible extension to non-standard measures if needed.

Fed Chairman Ben Bernanke said policy makers would not hesitate to launch QE3 if the economy to weaken. In addition, the Fed upgraded their growth and joblessness estimates this year, boosting high-yielding assets, while echoing that they will keep borrowing cost near zero till late 2014.

The Fed's comments came before the release of the first quarter growth data tomorrow which is expected to show that annualized GDP will record 2.5% expansion from 3.0% advance in the last quarter of 2011. In the FX market, the green currency continued its drop against a basket of major currencies following the Fed's comments, where the dollar index is currently moving around 78.95, noting that the breach of support at 79.30 on Tuesday paved the way for further drop.  

Moreover, still there are worries in France and Netherlands that political might hamper efforts to combat crisis due to conflict on austerity measures among political parties. Yesterday, the Dutch queen called for September 12 elections after the collapse of the government following the biggest opposition parties' refusal to support austerity measures needed to meet EU budget goals. Accordingly, the euro area's fifth-biggest economy is expected to witness a shaky economic and political outlook for several months.

The yellow metal is currently trading around $1,652.15, near the day's high, an ounce after managing to close above strong support of $1,640 yesterday. Crude oil for June's delivery is meanwhile showing a rise for a third consecutive session to trade around $104.37 a barrel after opening today's trades at $104.05.


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