Precious Metals get ready for a Hectic Day in Financial Markets
Precious metals began trading with a bullish lean throughout the Asian session today; awaiting U.S. jobs data that are to be released today. The U.S. economy seems to be showing some recovery signs, where it managed to show its first steps into exiting the technical recession, as the economy expanded by 3.5% in the third quarter. However, growth achieved in the U.S. economy was not accompanied by stabilization of unemployment rates or inflation levels, which had us revisiting last centuries' 1980s memories; when unemployment rates caused the downfall of the U.S. economy due to the deep recession at the time, after it was able to show some signs of growth when it began exiting the recession in the beginning of the 80's. (click here for information about the 80's economic recession).
Today's expectations saw some optimism lower layoffs, but at the same time we expect to witness some spikes in the U.S. unemployment levels reaching 9.9%; meanwhile, income growth is falling to 2.2% due to pressures towards consumers and consumer spending; whereas spending makes up three-quarters of the U.S.'s GDP, which could keep chances of growth and improvement for the economy at an extremely low level.
On the other hand, commodities declined significantly throughout yesterday's session; the S&P GSCI index closed down with 4.94 points, ending New York trading at 508.42, while crude fell yesterday. Meanwhile, the dollar showed volatile fluctuations but slightly depreciated. U.S. stock indices however closed with major gains, ever since the congress voted for more lucrative incentive plans to lower unemployment rates and help the housing market; where the DOW Jones index advanced by 2.8% and closed at 10005.96 points; while the American NASDAQ and S&P indices followed by witnessing major gains as overall Asian equities gained.
The major spike stock markets witnessed yesterday was at the expense of commodity markets, where global economy seems to be improving but at a rate that might not carry it into recovery. Meanwhile, the U.S. economy is also facing weak growth and low demand. From here we expect investors to start heading into stock markets to achieve gains and returns, leaving behind commodity markets which will slightly reflect on precious metal markets.
Gold fell 0.22% in New York yesterday, where it closed at 1089.50; silver followed by 0.29% and closed at $17.39 per ounce; whereas platinum sharply fell and recorded $1355.00 per ounce. The decline seen yesterday also included precious metals, which was due to the direction towards stock markets to attempt to gain from the surge witnessed.
As for today, precious metals slightly rose where silver managed to compensate for the losses it witnessed yesterday by gaining 0.35% today at precisely 02:19 EST, where its price is currently at 17.45. Gold was also able to record some gains today, rebounding back near its highest levels; trading at $1091.40 per ounce by gaining 0.17%. Finally, platinum rose today as well and was able to record gains by 0.22% at $1358.00 per ounce. Despite of the surge in precious metals today and fall witnessed yesterday, we still think that trading is occurring in a very narrow range; where gold has centralized near its highest levels recorded at the edge of $1100 per ounce. Gold markets no doubtedly are facing souring demand from investor and speculators in markets; however, demand is being overcome by headings for gold as a safe haven. Today, we wait for the release of important data, which will directly affect the dollar and thus reflect on precious metals. This data will also affect trader's expectations about the largest economy in the world, mainly how much improvement is really taking place and the reality in the job market; precious metal prices will move accordingly, but at the same time we see that gold will gain bullish momentum no matter what the data holds in store for us today; where the momentum could effect the medium term; whereas the intraday trend and short term will suffer from major fluctuations.