Gold rose to new record levels yesterday, touching $1043.77 before closing at $1017.65 in London last night according to data from the Financial Times. The strength of gold is due to a number of factors acting in concert.
Firstly, gold has always been viewed as a safe harbour in times of economic turmoil; secondly, the value appreciates when the US Dollar is weak and there is the whiff of inflation in the air and thirdly there was a rumour that a consortium of major oil producing nations were considering switching from the Greenback to a basket of currencies over the next nine years.
The rumour was published in the UK’s The Independent newspaper, but swiftly met with denials from Saudi Arabia and Kuwait. Earlier in the year, the Chinese had floated the idea that the Dollar might lose its role as the international reserve currency in favour of a new international reserve currency to be administered by the International Monetary Fund.
The Dollar was down to 89.125 to the Yen and 1.472 against the Euro at yesterday’s close.
Australia has managed to avoid the worst ravages of the global recession. It was the only member of the G20 to post growth figures for the first half of 2009. The Australian central bank, the Reserve Bank of Australia, has held interest rates at a relatively generous 3% since March 2008 - many central banks have interest rates well below 1%.
Yesterday, Australia became the first developed nation to raise interest rates since the global financial crisis began; the rate went up by 0.25%. The Australian Dollar has been appreciating against the Euro throughout the year and has gained slightly over 15% in value.
Firstly, gold has always been viewed as a safe harbour in times of economic turmoil; secondly, the value appreciates when the US Dollar is weak and there is the whiff of inflation in the air and thirdly there was a rumour that a consortium of major oil producing nations were considering switching from the Greenback to a basket of currencies over the next nine years.
The rumour was published in the UK’s The Independent newspaper, but swiftly met with denials from Saudi Arabia and Kuwait. Earlier in the year, the Chinese had floated the idea that the Dollar might lose its role as the international reserve currency in favour of a new international reserve currency to be administered by the International Monetary Fund.
The Dollar was down to 89.125 to the Yen and 1.472 against the Euro at yesterday’s close.
Australia has managed to avoid the worst ravages of the global recession. It was the only member of the G20 to post growth figures for the first half of 2009. The Australian central bank, the Reserve Bank of Australia, has held interest rates at a relatively generous 3% since March 2008 - many central banks have interest rates well below 1%.
Yesterday, Australia became the first developed nation to raise interest rates since the global financial crisis began; the rate went up by 0.25%. The Australian Dollar has been appreciating against the Euro throughout the year and has gained slightly over 15% in value.