Bull Run Continue In Gold

Gains Of More Than 1500 In Two Days On MCX

Gold topped $900 an ounce in intraday trading on Thursday, adding to its historic rally from the day before. December gold closed at $897.00, up $46.50 on the session. Prices touched as high as $926.00, a seven-week high. Gold has gained more than $120 in two days as traders turn towards the precious metal as a hedge in an effort to avoid exposure to plunging equities. MCX Gold October expiry contract was at Rs 13310 per 10 grams at the closure, a gain of Rs 564 in the intra day session.

The dollar edged higher in early Friday trading, rising above the 106-figure versus the yen and pushing the euro lower toward the 1.42-region. The advance in the greenback and stocks was prompted by discussions for the creation of a government-sponsored entity that would remove the illiquid assets on bank balance sheets that are the underlying source of the current stresses in financial institutions and financial markets.

In doing so, the government aims to restore confidence in the recently battered financial industry following the string of failures and halt any additional fallout on the already slumping economy.

Global central banks announced coordinated efforts to pump massive amounts of liquidity into the financial system to alleviate "continued elevated pressures in the US dollar short-term funding markets". The BoC, BoE, ECB, SNB, BoJ and Federal Reserve increased their swap lines to provide improved liquidity in both term and overnight operations. The FOMC has approved a $180 billion expansion of its swap lines, with the facility while the ECB increased by $55 billion to up to $110 million and the Swiss National Bank by $15 billion to up to $27 billion.

The US economic reports released on Thursday included weekly jobless claims, which jumped to 455k from 445k in the previous week, the August leading indicators and the September Philadelphia Fed survey. The August leading indicators index came in at -0.5%, improving from -0.7% from July while the Philadelphia Fed business survey unexpectedly increased to 3.8 versus -12.7 in August. There are no data releases slated for the Friday session with market movements largely dictated by any new revelations over the government's ongoing efforts to resolve the current crisis and turmoil in the financial markets.