(RTTNews) - Gold soared on Monday as traders turned to the precious metal's safety appeal amid ongoing turmoil in the financial sector. December gold ended the day at $875 an ounce, up $33 for the session. Prices hit as high as $879.00.
The flight to gold as well as the tumbling stock markets showed traders have a lack of confidence that the $700 billion rescue bill passed by Congress will help stabilize the U.S. financial system. Gold has seen highly volatile movement in recent weeks as the credit crunch continued to spread around the world.
The U.S. dollar saw mixed results against other majors amid the worldwide financial woes. The greenback declined against the lower-yielding Japanese yen, which saw strength across the board. The euro continued to tumble as Hypo Real Estate became the latest European lender to be bailed out. The pound also fell as traders expect a rate cut from the Bank of England later this week.
This will be a pretty slow week on the economic front. The Department of Commerce's international trade balance and the release of the minutes from the Federal Reserve's last meeting headline the agenda. Other reports set to be released include pending home sales and the weekly report on initial jobless claims.
Gold lost $11.10 on Friday as the House finally approved the sweetened bill to bail out struggling banking companies by a solid 263 to 171 margin. This came four days after an original plan was voted down, sending investors towards gold as a safety option.
The precious metal lost $55 an ounce last week as the dollar added to a yearly-high against the euro amid expectations of rate cuts from the European Central Bank by year's end. The buck also hit a yearly-best against the Canadian dollar and a three-week high against the British pound.
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