After yesterday’s gains China returns to push metals south
Precious metals managed to rise notably throughout yesterday's trading session, where gold recorded a new historical high at 1174.60 in New York. The major rise witnessed by precious metals was supported by greenback's slump. The dollar fell yesterday against a basket of foreign currencies, where it recorded its lowest level at 74.91; backing the purchase of precious metals, where focus was set on gold by traders and numerous other sides pushing forward to set reserves and safe havens against the dollar's drop and other reasons.
Meanwhile, the Russian central bank announced that it has purchased 500 thousand ounces of gold in October, where the bank raised its gold reserves by 2.6%. However, the numerous economic issues are forcing many central banks on diversifying their reserves, alongside the dollar's constant drop that is causing the rush towards gold as a safe haven.
Gold inclined throughout yesterday's trading session, where it was accompanied by strengthening risk appetite due to economic data released by the U.S. yesterday; pushing the dollar to plummet. Consequently, this led a liquidity rush towards precious metals and lift silver to 18.95; whereas platinum rose to $1482.00 per ounce.
On the other hand, gold closed at $1162.10 per ounce in New York yesterday, recording a gain by 1.15%; while silver followed and appreciated by 0.38% at 18.58; whereas platinum closed at 1455.00 higher by 0.69% as well.
Metals managed to end in London higher than they did in NY; where gold ended at 1169.50; while silver ended at 18.76; platinum followed to close at $1464.00 per ounce.
Prior to New York's closing; precious metals declined slightly from the clear profit-taking, alongside the spike witnessed by the U.S. dollar. Meanwhile, precious metals continued their bearish wave today, supported by the dollar's persistent rise from their levels yesterday, at a time where China's statement stimulated a huge profit-taking wave in financial markets.
China warned banks to control and apply rules on loans to avoid a possible credit bubble that might be forming, which therefore caused major drop in commodity and stock markets around the world; thus, making the dollar rise against a basket of foreign currencies. It also reflected on traders in the market and precious metals, causing massive profit-taking waves.
Conversely, commodity indices gained in yesterday's trading session as it came inline with precious metal prices rising; where the S&P GSCI index appreciated by 1.61 points yesterday, accompanied by the RJ/CRB COMMODITY index's gain as well by 0.37 points yesterday; meanwhile, futures on commodity indices fell due to the new laws set by China, which will lower China's major growth range, and therefore negatively reflecting on the global economy as a whole.
Today, precious metals are trading bearishly; where gold slightly dipped but did not surpass 0.18%, while it traded at 1162.00 (precisely at 02:19 EST); silver, however, faced the biggest drop by 0.70% to trade at 18.45; meanwhile, platinum equivalently fell alongside silver and is currently trading at $1445.00 per ounce.
Gold managed to slightly drop today, compared to that of platinum and silver, which hints that profit-taking is the dominant factor as some investors exit the market. The short term trend is still expected highly volatile and might be embedded with correctional waves and heavy downside movements yet does not alter the bullish medium term trend.