Gold reached record highs in the London and New York markets following Japan's sliced interest rate and increased asset purchases. The dip in the value of dollar has also contributed to gold's rising fortunes.
The demand of gold has risen globally and it has also triggered a rise in the value of silver, which is at a 30-year high.
The Bank of Japan has pledged to keep its benchmark interest rate at zero percent to 0.1 percent for the coming months. This is the first time since 2008 that the country has cut its lending costs. The move is expected to improve its balance sheet. The euro fell to a six-month low yesterday but it also impacted the dollar, which fell 0.6 percent. Bullion shares an inversely proportional relationship to the dollar and other world currencies.
Immediate-delivery bullion saw an increase of $13, or 1 percent, to $1,328.25 an ounce and traded at $1,326.97 at 9:01 a.m. in London. The value of gold for December delivery was up 0.8 percent at $1,327.70 an ounce on the Comex in New York, a dip from $1,329.60 earlier.
Gold has seen an increase of up to 21 percent this year and this is its 10th consecutive annual gain. The last time it saw that much rally was in the 1920s. Bullion has attracted record investments as global equities, Treasuries and other industrial metals have failed to match up to its glimmer. Low borrowing costs and government spending is expected to further boost its value in the coming months.
