interest rates

Wednesday in Singapore, bullion prices climbed to within sight of a record above $1,250 an ounce struck the previous day, with dealers considering gold to be likely to consolidate before any charge higher.

Spot gold was at $1,238.05 an ounce by 6:24 GMT, up $4.42 from New York's notional close on Tuesday, when it rose as high as $1,251.20 marking its highest ever.

Senior U.S. Federal Reserve officials placed different emphasis on inflation risks on Thursday, with one warning failure to withdraw support policies soon enough could trigger inflation while another played down such risks.


Kansas City Federal Reserve Bank President Thomas Hoenig said the Fed should act sooner rather than later to contain longer-term inflation pressures and avoid sowing the seeds of a future crisis.

According to the World Bank report published in Wednesday's Financial Times, swift interest rate hikes targeted at containing inflation in product and asset prices could lead to another recession in US and European countries, economies of which are recovering slowly. 

 Chinese Premier Wen Jiabao made an announcement on Sunday concerning the condition of global economy. He emphasized that China hopes the United States will keep its deficit to an appropriate size to ensure basic stability in the U.S. dollar exchange rate.

At a news conference in Egypt Wen said: "We have seen some signs of recovery in the U.S. economy ... I hope that as the largest economy in the world and an issuing country of a major reserve currency, the United States will effectively discharge its responsibilities.”

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What is Carry Trading? It is considered one of the most popular strategies used in forex trading. This is a very good form of trading as a forex trader sells a currency having lower interest rate and then acquires another currency which produces an interest rate that is now significantly higher.