December 18, 2014
Gold regained most of the ground lost Monday as the rouble went into freefall despite the frantic attempts of Russia’s central bank to prop up its beleaguered currency.
The spot price shot up US$11 to US$1,203 as fears grew for the Russian economy besieged by a crumbling oil price and sanctions.
The rouble dropped 19% against the dollar to more than 80 despite interest rates rising to 17% overnight.
It was not only Russia’s currency in trouble, though.
The Turkish lira slumped to an all time low, while latest data showing Chinese manufacturing declined last month only added to the bearish mood sweeping through equities markets.
US stock markets opened lower ahead of the start of the latest meeting of the US Federal Reserve’s interest rate committee.
Whether the volatility that has seen US shares fall for six days out of seven has any impact Fed thinking won’t be apparent until Janet Yellen gives her press conference after its conclusion Wednesday.
The US is also becoming a beacon of growth in an increasingly frail-looking world and how Fed chair Yellen sees that will also be keenly watched.
Elsewhere, the Indian government is already said to be looking at its decision to relax gold import rules after a surge of gold into the country.
Imports in November were 151 tons, the trade ministry said, with a value six times greater than this time a year ago.
One reason for the import restrictions being imposed in the first place was the strain it was putting on India’s trade balance but lower oil prices may be offsetting this said Commerzbank.
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