12/09/07: All change on financial markets

Gold investors were watching the turbulent financial markets with a keen eye yesterday (September 12th) as many factors affecting the price of the precious metal underwent changes.

Dollar values against a range of currencies finally rose up from the 15 year low that has seen it stabilize at under £0.50 pounds sterling, with US stock holders profiting from a rise in the value of investments made in the dip.

Meanwhile oil prices rose considerably, to top the $80 dollar per barrel mark in European trading this morning (September 13th), dealing a boost to the shares of companies like Royal Dutch Shell, but reducing European investor confidence elsewhere.

For the gold trade, oil price rises generally mean good news, as investors flock to the precious metal as a safe-haven hedge against petrol-fuelled inflation.

Gold buyers and sellers will, however, be cautious, with crude futures slipping 16 cents in overnight electronic trading to fall back below yesterday's $80 mark.

The greatest uncertainty though is in relation to prospective action from the US Federal Reserve, with financial markets reported to be expecting a lowering of interest rates by at least 25 points at next Tuesday's meeting.

In recent weeks Ben Bernanke, chairman of the Federal Reserve, yielded to concerns over a liquidity crisis in the US economy by lowering discount rates, but many are calling for further action to relieve the credit crunch.