FXstreet.com (Barcelona) - Renewed euro-zone bank jitters as well as fresh disconcerting signals of a weak global economy is buoying the price of gold to historic levels due to the safe-haven appeal of precious metals. In early trading over New York, the most active gold future for December delivery trades at $1258.10 a troy ounce after topping $1260.00 just prior.
The market is once again focusing on the health of the euro-zone banking sector after the WSJ reported the recent sector-wide stress tests underestimated exposure to government debt. The information comes at the same time officials meet in Basel to hash out new global capital requirements for the industry in the face of the financial crisis.
What’s more, today’s RBA statements in which they described the global recovery as “somewhat uncertain” has the market thinking twice about the recent rally. The skeptical commentary is further exasperated by a glum German manufacturing report which showed factor orders dropping 2.2% in July despite expectations of a 0.5% rise.
