Gold surges near $900 as credit crisis deepens
When bourses all over the world are tumbling people are worried about their investment options. Gold is all time favourite during the economic crisis. The metal has long been considered a safe, alternative investment, primarily because it's known for holdings its value over time. And now Gold prices have started surging. Demand for gold jewellery and other items usually picks up around the festivals and the traditional wedding season in India. These event gold sales usually goes up a lot.
Gold prices spiked near $900 an ounce on Thursday as unnerved investors poured money into safe-haven assets for a second day on fears that a US recession is all but unavoidable.
Gold is up about $100 in a frenzied two-day rally, including the largest ever one-day price advance on Wednesday.
The metal's latest push came as the Federal Reserve stepped up efforts to stem the worst financial crisis since the Great Depression. The central bank pumped $55 billion into temporary reserves in the United States to free up the strained financial system. Hours earlier, the Fed joined other central banks to flood world markets with dollars, hoping to stave off a collapse of international credit markets.
The emergency moves helped boost the stock market a day after a massive decline, but many investors, fearing more turbulence in coming days, continued to shift funds out of riskier investments like stocks and into the relative safety of precious metals and US Treasury bills.
The influx of money marked a sharp turnaround for gold, which had seemed to be frozen in a monthslong lull since shooting above $1,000 for the first time ever in March.
``This is a very scary time and everyone is asking one thing: 'Where is the safest place to put my money?' Right now, gold looks like a good place,'' said Kevin Grady, a gold trader at MF Global in New York.
Gold for December delivery jumped to $897.40 an ounce on the New York Mercantile Exchange before easing back to $878.10, up $27.60. On Wednesday, gold rose as much as $90 before settling $70 higher at $850.50 an ounce, the biggest one-day jump ever.
Other precious metals also shot up Thursday. December silver jumped 67 cents to $12.345 an ounce on the Nymex, after earlier rising to $13.065. December copper rose 5.95 cents to $3.102 a pound, while October platinum gained $33.70 to $1,120 an ounce.