Gold rallies

Gold Rallies Towards All Time High

The dollar's fortunes reversed sharply, falling from near the 107-level against the yen to plunge to the 104-handle after it was announced that the House of Representatives voted against the $700 billion bailout plan by a vote of 228 to 205. The failure to pass the Administration's plan to purchase toxic assets off banks' balance sheets was incredibly disappointing to markets and heightens uncertainty over the outlook for the financial sector and raises the risk for the economy to plunge into a prolonged recession.

Gold for December delivery rose $5.90, or 0.7%, to close at $894.40 an ounce on the Comex division of the New York Mercantile Exchange. MCX Gold contract for October expiry closed the session at Rs 13455 per 10 grams up Rs 301.

Global central banks continued to pump liquidity into the financial system with another bout of coordinated intervention. The Fed announced that it would be injecting another $630 billion in an effort to prevent the credit markets from locking up.