Precious Metal Markets Tumble
The U.S labor report last Friday reported an unexpected fall in the unemployment rate to 10% and the lest jobs loss in a month since the start of the recession, which for the first time provided the strongest indication that the recession indeed found a bottom. This data fueled a strong wave of optimism that the U.S. economy might start recovering soon.
Federal Reserve Chairman, Bernanke, has previously said that the monetary policy will be tied to conditions across the labor market and according to consumption levels; after unemployment levels fell investors felt strongly positive over heading into the markets.
Investors head towards selling precious metals intensively throughout Friday's trading session, where gold managed to drop from its highest at 1211.20 to record the lowest at 1147.40 before closing near its lows down by 3.82% at $1162.00 per ounce; meanwhile, silver fell by 1.81% and closed at 18.47; whereas platinum followed and depreciated by 2.90% to close at $1439.00 per ounce.
Gold dropped by 3.82%, where platinum and silver also fell by 2.90% and 1.84% respectively; indicating that what is currently occurring within financial markets is estrangement from the safe haven, especially after the release of U.S. data. On the other hand, the dollar ascended and was the main pillar behind speculations and investments within the market, triggering a profit taking wave and strong selling on precious metals.
The selling pressures were concentrated in the U.S. session; where the London Fixing witnessed a severe drop in the evening fix after the labor data, gold slumped from 1203.25 in the AM fixing price towards the PM Fixing at $1190.25 per ounce; while silver slightly dipped to $18.83 from Thursday's fix; whereas platinum fell from 1484.00 to $1472.00 in the evening fix.
U.S. indices rose on Friday, and as for the start of this week's trading, the Asian session witnessed high volatility and mixed performance, yet the session generally ended positive, which added further downside pressure on metals.
Consequently, precious metals continued plummeting in the Asian session; gold fell to 1155.90 and silver continued falling, where we see it currently trading at 18.25; finally, platinum plunged to 1434.00. This drop today was due to investors continuing to head towards investments and higher yielding assets, where stock are considered to be one for now. The metals' provide quotes were precisely as of 02:34 EST.
As we previously mentioned in past reports, possible volatile major corrections will be seen, where we currently see these corrections in fact continuing for some time. Meanwhile, the medium term trend is still expected with more bullish movements for precious metals, specifically gold.