Gold rises against all major currencies; hits 5-week high vs. the Dollar
Spot Gold Prices rose to a fresh 5-week high late in London on Thursday, touching $669 per ounce just before the end of the European session.
"The Dollar has room to drop further," said one US commodity broker to Bloomberg, "so gold looks very attractive."
But Thursday's move also came against the other major currencies too, as the demand for gold outpaced the desire to simply swap Dollars for more government money.
The Price of Gold in Pound Sterling rose nearly 1.5% for the day to break £329 per ounce, its highest level since June 20th.
For French and German investors wanting to Buy Gold Today, the price rose more than 1% to break €485.75 – a near 3-week high against the Euro.
Global stock markets also rose strongly as bond prices fell, pushing the 10-year US Treasury yield four points higher to 5.13%. Despite the rising rate of return, the US Dollar slipped to a fresh record low versus the Euro of $1.3790. Against the Pound the Dollar was steady.
"Gold is supported by the weakening Dollar, driven by the continued concerns over the US subprime mortgage market in the past few days," reckons Michael Widmer at Calyon Bank.
"It is likely that the stream of bad news in the mortgage market will not abate. Investors are also set to look at signs that may indicate any contagion from the housing market in the US economy.
"Against this backdrop, it is likely that gold prices will be strong in the coming days."
To read more about the risks posed to the financial markets by the collapse in subprime mortgage-backed bonds – and why the Gold Price may benefit – click here for a detailed report now...