"We have to broaden [gold's] range," says Jon Nadler, senior analyst at Kitco.com. "Over the last week, I think a lot of rulebooks and assumptions will have to be rewritten ... the range we can expect here ... is probably between $1,380 and about $1,430." Gold is relatively flat from Monday but had to contend with a double digit painful selloff Tuesday.
Reportedly Japan has bought more than $20 billion U.S. dollars and is also selling yen. Other countries like the U.S. are actively supporting this move. The yen was falling 2.54% against the dollar. Japan has offered up almost $800 billion to shore up its economy in the past week and expanded its bond buying program to 10 trillion yen. The efforts should have dragged on the yen, but it didn't. Speculators who had been betting the yen would fall had to buy it back to cover their bets, and companies and individuals are rumored to have been selling other assets for yen as well. Any sort of whisper of currency intervention typically gives gold a boost as it reminds investors that paper currencies are at the mercy of central banks and highlights gold's appeal as a safer place to store wealth. The currency market can also be very volatile which also makes gold, a hard asset, more appealing.