The gold bullion continues to soar on Friday, as global foreign exchange rate policy tensions as well as US dollar weakness make the precious metal attractive as an alternative investment. In early trading over Europe, the gold contract for December delivery has set a new record high in $1284.40 a troy ounce, nearly $8.00 from the opening price.
Despite a slightly improved risk appetite by the end of Thursday with US equities finishing the day in positive territory, the gold bullion remains strong as exchange rate tensions multiply. The US Treasury Secretary Tim Geithner yesterday testified against Chinese exchange rate policies, stating the yuan has not been allowed to appreciate quickly enough. Consequently speculation is spreading through the market of competitive depreciation, only a few days after the BoJ intervened in their own foreign currency market in order to counter the strength of the yen.