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Gold prices have surged three percent on yesterday’s trading which has boosted the investors’ confidence in the yellow metal. According to reports the increase in gold prices is due to a slide in the dollar’s value. Additionally, investors in gold feel that a temporary deal to avoid a U.S. debt default might prompt the Fed not to reduce its monetary stimulus.
The deal to raise the U.S. debt ceiling had a positive role in the rise of gold’s prices as unusually heavy buy orders dramatically lifted the gold market by $40. The benchmark U.S. Comex gold futures contract for December delivery got sharp price swings where spot gold rallied to a high of $1,324.06 per ounce.
Some estimates say that the prices at $1,300 an ounce indicate that the yellow metal is heading for its best week in two months. In fact, the gold prices are up 3.5 percent this week in the best showing, the only better time was before Aug. 16. Earlier the U.S. lawmakers reached an agreement that funds the government through Jan. 15, 2014.
Though it is a temporary measure, it has nevertheless worked for the investors who were losing confidence in gold. If gold prices and fluctuations is kept in perspective it is evident that the precious metal lost 21 percent this year on expectations the Fed will slow its $85 billion-a-month of bond buying as the economy improves.
