Global equities selloff increase the demand for precious metals
Bullion prices rallied on Tuesday, 09 December 2014 at Comex to reclaim the $1,200 level in response to a global equities selloff. Investors from Shanghai to New York dumped stocks as Chinese authorities took steps to tighten lending regulations while fears about Greece resurfaced after Athens announced it would hold its presidential election two months ahead of schedule.
Gold for February delivery jumped $37.10, or 3.1%, to settle at $1,232 an ounce, its highest close since the end of October.
March silver added 86 cents, or 5.3%, to $17.13 an ounce.
The U.S. dollar moved down sharply against the yen, pushing back below 119, as a rout in stocks across the globe sent investors into the perceived safety of the Japanese currency. A day earlier, gold rebounded as weak global economic data revived safe-haven demand for the precious metal. China, which relies on exports to fuel economic growth, reported its exports rose more slowly and Japan's economy shrank for a second straight quarter.
Asian stock markets saw strong selling pressure on Tuesday from a move by Chinese officials to tighten regulation of its domestic bond market. And in the European Union, notions that Greece could pull out of the union if more liberal leaders are elected added to the anxiety in the market place. The other element mentioned as somewhat unsettling was a report that the Federal Reserve at next week's FOMC meeting could sound a more hawkish tone on U.S. monetary policy.
The World Bank on Tuesday forecast the Russian economy to contract by 0.7% in 2015. The Russian ruble continues under pressure this week and is at a record low versus the U.S. dollar. Reports Tuesday said the Russian central bank is adding more gold to its reserves as the ruble deteriorates.
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