The following chart provides a update on the current 24h spot price of gold. Chart and commentary to follow ~

Courtesy of Financial Times:

Financial markets received a grim reminder of global geopolitical risk on Thursday as the assassination of Pakistan’s opposition leader Benazir Bhutto helped fuel demand for the relative safety of gold, US Treasury bonds and the Swiss franc.

The nervous mood in the markets was heightened by the release of much weaker than expected US durable goods orders data, which triggered fresh worries about the global economic outlook.

However, analysts pointed out that thin end-of-year trading conditions had probably exaggerated some price movements.

The killing of Ms Bhutto at a political rally in the city of Rawalpindi came barely a fortnight after President Pervez Musharraf lifted emergency rule in the country.

Nizam Idris at UBS said the former prime minister’s death was likely to lead to further political and social instability in Pakistan and across the subcontinent.

“Risk has clearly increased in the region, and given that Pakistan is a critical player in the global US strategy against terrorism, the dollar is likely to come under pressure as a result,” he said.

“From a market perspective, however, it is important not to over-react to this event.”

Gold touched a one-month high of $830.65, further aided by the broadly weak tone of the dollar. The Swiss franc climbed 0.7 per cent against the US currency and 0.2 per cent against sterling, and the yield on the 10-year Treasury bond fell 6 basis points to 4.22 per cent.

The other main driving force in the markets yesterday came from a weak set of US durable goods orders figures for November.

Orders edged up by just 0.1 per cent, well below the consensus forecast for a 2 per cent increase.The ex-transportation component slid 0.7 per cent after October’s 0.9 per cent fall.

James Knightley, economist at ING Financial Markets, said the data added to the downside risks for US growth and therefore interest rates.

“We continue to believe that these concerns will more than offset the Federal Reserve’s near-term inflation worries, and lead to rates coming down to 3.5 per cent in the second quarter of next year.”

The futures market increased the odds of the Fed cutting its target funds rate by a quarter point at its next meeting on January 30 to 78 per cent from 68 per cent on Wednesday.

There was also disappointing news on the US labour market as initial jobless claims unexpectedly rose last week, taking the number of continued claims to a two-year high.

However, there was a modest improvement in US consumer confidence in December. The Conference Board’s headline index rose to 88.6 from an upwardly revised 87.8 in November.

Mike Englund at Action Economics, said: “These figures combine with other sales data to suggest that the consumer has yet to show the widely expected signs of ‘cracking’ in response to housing and credit market turmoil.”