Gold prices dived to the lowest, prices that have not been seen since October 2007 and actually the decline in oil prices is the major factor that should be blamed for pulling down gold prices and eroding its appeal of a hedge against inflation. Still, today the precious metal started to incline but slightly as the green currency lost some ground in the market and since crude prices increased having the gold so far record a high of $780.25 an ounce.
Crude prices inclined a little supporting gold to do the same as OPEC finally approved to cut the amount of oil supplied by about 520, 000 barrels per day for at least two months resulting in crude jumping more than a dollar. Up till now, oil prices opened at $102.20 a barrel recording a high of $104.67 a barrel and a low of $102.06 a barrel making the crude contract slightly gain by $0.33 a barrel.
The green currency fell against majors in the market as carry trading transactions are taking place, due to the fall in the stock markets yesterday after Lehmann Brothers has been downgraded by Standard & Poors adding more worries concerning the financial markets and institutions as they fear the incapability of Lehmann Brothers to provide liquidity, having investors buy high-yielding assets as the euro and the royal pound and since crude prices inclined reducing the appeal of the dollar and consequently favoring the swapping of investments from the green currency to the commodities oil and gold.