Gold prices jump as US dollar tumbles
Gold rose sharply this afternoon as the US dollar, which is seen as an alternative asset to the yellow metal, dipped after the Federal Reserve and five other top central banks including the ECB took action to support banks.
The six central banks have agreed to reduce interest rates on US dollar swap arrangements by 0.5 percent from December 5 to make it cheaper for banks to buy the American currency to improve liquidity in the banking sector.
The move has also hit the US dollar's safe haven appeal by lifting confidence that Europe and the US will do what is necessary to avoid a double dip recession.
Yesterday's comments from vice chairman of the Federal Reserve Janet Yellen provided more support for gold prices, while weakening the US dollar.
Yelen indicated that the Fed could opt for further economic stimulus to support the ongoing recovery and tackle unemployment, which would likely lead to an increase in inflation.
Gold traded at US$1,749/oz, up US$34 from Tuesday's close. Silver rallied US$1.01 to US$32.93/oz and platinum advanced US$19 to US$1,554/oz.
Today's top risers in the sector were:
Solomon Gold (LON:SOLG), up 26 percent at 11.2 pence at midday
North River Resources (LON:NRRP), up 13 percent at 1.92 pence
Mariana Resources (LON:MARL), up 10.5 percent at 10.36 pence
Bezant Resources (LON:BZT), up 9.5 percent at 26.38 pence
Hochschild Mining (LON:HOC), up 8 percent at 444.1 pence
The top fallers were:
Angel Mining (LON:ANGM), down 11.5 percent at 0.95 pence at midday
African Consolidated Resources (LON:AFCR), down 7.5 percent at 2.31 pence
Alecto Minerals (LON:ALO), down 7 percent at 1.86 pence
GGG Resources (LON:GGG), down 5.5 percent at 16.46 pence
Obtala Resources (LON:OBT) down 3 percent at 31 pence
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