(RTTNews) - The price of gold closed sharply higher for a third straight session on Wednesday. Gold for December moved to $906.50, up $24.50 for the session. The metal hit a 10-day high of $924.90 earlier in the day.
The precious metal has added more $70 an ounce so far this week. Gold has erased its sharp losses from last week, when it lost more than $55 an ounce on a surging dollar.
The dollar continued its assault against the sterling and loonie and saw little change against the euro and yen. Usually, gold moves opposite the dollar. But with the financial situation bleak around thet globe, traders flocked to the precious metal as a hedge investment.
In the big news of the day, the Federal Reserve slashed its benchmark interest rate by a 50 basis points to 1.5 percent, in a cooperative effort with other central banks. The Bank of Canada, the Bank of England, the European Central Bank, Sveriges Riksbank and the Swiss National Bank also cut rates on Wednesday. Australia reduced its rates on Tuesday.
The Bank of Japan did not announce a rate cut, but expressed its strong support for the policy actions.
On the econmic front, a government report showed that the pending home sales index jumped 7.4 percent to 93.4 in August from an upwardly revised reading of 87.0 in July. The increase came as a surprise to economists, who had expected the index to decrease by about 1.2 percent.
In other commodity news, oil prices plunged below $88 a barrel as Energy Information Administration data showed a second straight build in weekly crude and gasoline inventories. U.S. crude oil stockpiles increased by 8.1 million barrels from the previous week. Total motor gasoline inventories increased by 7.2 million barrels last week. Both were much higher than analysts' expectations.
