Spot gold pushed higher to $1779 in the European session as the Bank of Japan announced that it will increase its asset buying and loan programme by 10 trillion yen.
The Bank of Japan announced was right in line with Central banks around the world have been doing, following in the footsteps of The European Central Bank and the Federal Reserve of the U.S. Central bank accommodation is viewed as bullish for gold because it devalues paper currencies and leads to future inflation.
Federal Reserve Bank of Chicago president Charles Evans, who is noted as being very dovish made headlines yesterday in defence of QE3 and said that the Fed's are determined to jump start the economy and bring down the stubborn high unemployment.
In U.S data released this morning building permits came in at 800K for August, down from 810K in July, housing starts were at 750K, up from 730K and existing home sales read 4.82 million, up from 4.47 million. The U.S dollar traded slightly lower on the day after the disappointing housing data.
Spot silver continues to trudge higher, after touching $35.06 in yesterday's trade the dual role metal slumped back to $33.39 as it continues to consolidate the large move over the past month. Silver enjoys a wide range of important uses in industry. Industrial applications accounted for over half of world fabrication demand in 2011. Unlike gold fabrication, which is heavily reliant on jewelry, silver can call on a more diverse range of applications. Pushing the price higher these days have been investor demand as they see it as a cheaper alternative to the high priced gold.
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