Precious metals on the rise as the week comes to an end
Precious metals rose throughout yesterday's trading session after the release of U.S.'s GDP, which has given investor hope that the U.S. and global economy is continuing in its steady pace of exiting the recession. This optimism overshadowed financial markets pushing main stock indices upwards, due to major investment demand from speculators, thus causing the Dow Jones Industrial Average to surge and close at 9962.58 yesterday, gaining 2.05%; whereas European and Asian indices followed, where we witnessed a rise on numerous stock indices for major countries in Asia; Japan's Nikkei recorded a rise of 1.45% to close at 10034.74 points.
The huge optimism that overwhelmed financial markets yesterday continued today as well, pushing purchasing liquidity towards different financial markets; where precious metal markets gained some momentum due to the unique characteristics they have, alongside them being a good investment opportunity in markets. The demand on precious metals stands out to traders that want safe market returns on secure investments against the unpredictable circumstances in the economy; meanwhile, there are also some that are looking for a safe haven against inflation that could occur if the global economy rebounds strongly.
On the other hand, even if economic growth remains weak, we find traders preferring precious metals a lot more, since the dollar's fall encourages them to buy the metals due to the security they provide by being able to preserve the purchasing power for the currency.
Gold inclined throughout yesterday's trading session, closing at $1045.80 per ounce and rising by 1.76%; meanwhile silver sharply rose to close at 16.67 surging 3.35%; whereas platinum also witnessed a gain by 2.61% to close at 1339.00. We see that the rise witnessed was on silver's side, due to the major demand precious metals are witnessing from market speculators; whereas platinum faced demand that excelled due to expectations of platinum witnessing a rise, as well as the gradual improvement of industrial sectors around the world. However, platinum, alongside being a precious metal, is also considered to be an industrial metal. Meanwhile, less volatile trading yesterday; where investors' demand was larger than that of speculators, since they were inline with demanding a safe haven against any economic uncertainty especially with the seen U.S GDP that still raises doubts! So, we see that gold was characterized with an investment called rational investment yesterday, more than any other metal.
Today, we witnessed very narrow trading on gold leaning to the upside to trade at 1046.70, precisely at 03:10 EST; whereas silver and platinum fell by 0.30% and 0.82% respectively, showing that gold still holds onto its attractiveness till this day as a rational investment. Meanwhile, silver today traded at 16.62 and platinum at 1328.00, amid profit-taking from speculators in search for a good investment with good market return.
Crude, on the other hand, rose yesterday alongside the dollar's fall being the main reason that helped the direction towards precious metals; where we mentioned in our report yesterday, the dollar's movement could be the first mover for precious metals. Nonetheless, as we near the threshold of the weekend, today we could witness volatile trading between profit-taking and demand on all kinds of investments on precious metals, where we could also see unclear fluctuations that might lean towards the downside on liquidations for positions. Meanwhile, the medium direction still remains bullish; where we see new investment moves everyday, stabilizing the pace towards precious metals that might carry it later into new bullish waves.