Fundamentals

Despite the fact that gold gained yesterday on a weaker dollar, yet it seems like its going for a second weekly decline as the gains by the dollar earlier this week and crude trading below a record had more impact. The shiny metal is slowly losing its appeal now in the markets as the main drivers behind its 32 percent advance over the past year have become less supportive. On an intraday basis, we see that the metal is in an overbought area where it could reverse to the downside as technical indicators have pointed out yet it will face a support area at $877.60 per ounce where if breached will possibly extend to the downside to the $874 - $875 per ounce levels. Since the beginning of the day and up until the hour of this report, the bullion has recorded a high of $882.25 per ounce and a low of $876.95 per ounce where it is currently trading at $879 level facing currently a support level at $879.50.

As for crude, it was able to recover all the losses it had recorded earlier this week as Mr. Trichet said in a press conference yesterday that there is a possibility of a rate hike in the next month which sent the Euro high against all majors. The dollar declined making commodities more appealing and oil attractive as a hedge against inflation. Prices jumped more than six dollars to currently trade just below $129 per barrel level as it recorded a high of $128.82 and a low of $127.88 per barrel level.

The greenback has lost all grounds it had gained against the Euro this week after investors were happy to hear that the ECB might hike their benchmark next month which also offset the set of fundamentals that showed upbeat data from the US. Despite the fact that market mix up remains concerning the labor market today market players wait for a great market mover in order to really understand the state of the labor market that hasn't been yet determined as soft or robust. Maybe the tables turn one more time to see the dollar rise by the end of the day, but we can't take that decision and we can't anticipate anything in the markets as we learned before that it is full of surprises. We await the infamous Job's report...