The US Federal Reserve is announced a strategy to stimulate their ailing economy by selling $400 billion of its short-term securities and exchanging them for $400 billion in long-term securities, a move that’s designed encourage lending and borrowing among US banks and businesses. However, this news caused the price of gold fall and the dollar to rise at ForexYard and other online commodities and Forex brokers.
Following the news from the Feds, the price of safe haven commodity – gold – fell by over $26 per troy ounce during Wednesday’s trading sessions. The price of gold at ForexYard fell from $1,809.10 to $1,782.60 but, most unusually, the price of silver rose during the day. Silver prices normally shadow gold prices but today things were different. As gold was shedding dollars the price of silver rose by a little under 1 per cent, while palladium and copper also made small gains.
Once again the price of gold has surpassed record highs, trading as high as $1,609.30 per ounce at eToro during the Tuesday trading sessions. The new record price for gold has come about largely due to weakened dollar and the troubled euro, as commodities and Forex traders sell dollars and euros in favour of the safe haven commodity that is gold.
Even though gold prices have retreated a little since Tuesday, at the time of writing this article gold was being sold for $1,589.53 at eToro, with no sign of a landslide fall in the precious metal’s fortunes anywhere in sight. Gold’s most recent charge is mainly due to economic issues and weak currencies on both sides of the Atlantic.
The US dollar has been through the mill recently, losing ground against many of its counterparts over the last few weeks, with investors seeking positions elsewhere. It really has been a bad month for the dollar, the worst since September, ending with the US currency falling to a 2 ½ year low, with the US Federal Reserve’s ultra-loose monetary policy seeming to be the major factor in the dollar’s recent downfall.
The only saving grace for the dollar during Friday’s trading sessions was the measures taken by traders at ForexYard and other brokers to settle positions ahead of the weekend, allowing the struggling US currency a little breathing space to recover. However, many market insiders and analysts believe that the fortunes of the dollar will continue in a similar fashion on Monday when Forex trading resumes.
Fears of inflation pushed gold prices up during Friday’s trading sessions as traders at ForexYard and other online Forex brokers saw the precious metal as a safe hedge against the impending inflation rise expected in the US. A rise in inflation will often suppress a currency, which is the US dollar in this case. And traders have been selling dollars and buying gold, which has pushed its price to new highs.
During Friday’s US trading session gold climbed by 0.9 per cent to $1,486 per ounce before declining a little. However, it wasn’t just gold that was on the move. Traders also opted for silver as a safe haven commodity as they sought risk aversion tactics as the dollar fell. Silver closed this evening at $42.57 an ounce, which is a 31-year record high for the popular precious metal. The advances of silver made an overall gain of 2.2 per cent on the week.
Even though the euro has already benefitted greatly from the predicted interest rate rise tomorrow it still continued to make headway against its US counterpart, while the Japanese yen dropped to new lows. Forex traders at eToro watched the euro soar to a 14-month high against the dollar during today’s European trading sessions, at the same time as the yen fell to a a six-month low against the dollar and an 11-month low against the euro.
Unsurprisingly, the Japanese yen has been under the cosh since the devastating earthquake and tsunami that threw the yen into a chaotic position. However, the Bank of Japan has made numerous efforts to stabilise the yen but this hasn’t stopped the Japanese currency falling further. The EUR/JPY climbed to a high of 121.97 before settling at 121.70, which the USD/JPY was up 0.2 per cent at 85.12.
Yesterday saw North and South Korea exchanging a volley of shells near to their disputed border territories and as any good skirmish does, the Korean conflict boosted gold prices at online brokers such as eToro. However, the civil unrest in Korea only managed to create a temporary spike as the strengthening dollar quickly suppressed the rising price of gold.
You may be wondering how an outbreak of military conflict can affect the price of gold, there certainly aren’t any gold plated tanks that I know of! Once news of the conflict in Korea had made its way across Asia risk aversion tactics were quickly employed. These tactics included selling local currencies against the US dollar, a popular safe haven for investors and in turn pushing up the price of gold.
According to a report from the Bank for International Settlements in April the average daily volume of Forex trading is just shy of $4 trillion. Not $4 million, not $4 billion…$4 trillion…every day! And out of all this Forex trading the US dollar is the most traded currency by a long, long way.
Being one of the world’s global reserve currencies and the most commonly used currency for worldwide international transactions it should come as no surprise to see it outstrip the likes of the British pound, Japanese yen and even the Euro.
Gold hit record highs as the dollar slumped following news from the US Federal Reserve that suggested that it may take precautionary steps to stimulate the US economy. Traders at eToro and other Forex markets across the globe witnessed the greenback’s demise, which in turn pushed the spot price of gold to an all-time record price of $1,290.70 an ounce.
The US Federal Reserve stated that it would intervene if necessary to avoid deflation but this news triggered an immediate selloff of the dollar. These proposed moves are an attempt to support the economic recovery in the US and to return inflation back in line with the Reserve’s mandate.
Following the release of various economical and corporate data today, Forex Traders Saw The US Dollar And The Euro Grow In Strength against many other foreign exchange currencies. The US dollar was given a welcome boost by encouraging manufacturing news, while the Euro benefitted from news of an ambitious fiscal cutback plan.
Forex traders it sites such as Finexo saw the dollar rally against the Japanese yen following a report which showed U.S. manufacturing exceeding predicted figures. The Institute for Supply Management said US manufacturing figures showed that manufacturing volume had expanded in January for the sixth month in a row, to the highest level for over five years. On Wall Street the dollar rose 0.6% against the Japanese yen to a session peak of 90.88 before finishing the day at 90.86.
Many global markets faced significant losses following a speech regarding the US economy on Thursday. President Obama’s Banking Reform Plans Scared US Markets, with the main US share index, the Dow Jones falling over 200 points as Obama gave his speech regarding plans to limit the size of banks and restrict their trade in a bid to avoid a repeat of the large scale economic crashes witnessed recently.
The Dow Jones finally ended the day 213 points down from where it began when the markets opened on Thursday morning. Two of the US’ biggest banks, JP Morgan Chase and Bank of America saw their share values plummet with JP Morgan Chase losing 6.6% and Bank of America falling by 6.2%. But it wasn’t doom and gloom for all investors. There were many profits made for investors using fixed odds financial betting who predicted the US President’s actions and bet that the markets would fall, which they duly did. Plus there were some fantastic odds to be had at financial betting companies like BetOnMarkets.
