Gold Rallies for Fifth Straight Trading Day on Eurozone Debt Deal
Gold gained 1.5 per cent on Thursday for the fifth straight trading day to attain $1,750 per ounce on major commodity markets around the world as investors saw the European debt deal as a positive tone towards easing the region’s debt burden.
The EU deal provides for banks to waive 50 per cent of Greece’s debt burden in order to make the outstanding loan manageable for the financially troubled EU nation and the Eurozone leaders have also agreed to an expanded bailout measures for the region in addition to recapitalizing the region’s hard-hit banks. This EU debt deal led to the dollar crumbling against the euro and other five major world currencies.
Gold rose by about 6.8 per cent this week as a result of regaining its status as a safe haven against inflation. An analyst, Frank Lesh, a Chicago based commodity trader observed that this trend was made possible for gold because ‘’investors have considered the weakness of dollar and the possible inflationary effects of Europe’s debt crisis.
Bill O’Neill, a market analyst and a partner at LOGIC Advisors, a commodity investment company, was of the opinion that this new gold price hikes ‘’is beyond a magic wand, though it outperforms investors’ expectations yet it is a very good beginning for gold.’’
Meanwhile, the president of Adrian Day Asset Management, a firm that manages assets worth $160 million assures investors that the pressure to sell gold was over ‘’except the stock market experience a huge collapse.’’
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