A new week starts and metals are bullish
Metals inclined by the end of last week's trading, while oil as well advanced above $79 per barrel, supported further by the dollar's decline, fueling investors to head towards metals.
On Friday, gold inclined to end in New York at 1117.00 per ounce. The incline was mirrored by silver which advanced 2.91% while platinum added 1.32% to each close at 16.29 and 1531.00 respectively. The upside move wave fueled by speculative demand, which was clear by silver's gains which is dominated by speculative investments.
The bullish move was not only supported by speculative demand, yet as well the expectations for stability in the global economic outlook and the continued pace of recovery fueled higher demand expectations and recovery for the commodities and metals in general. While this week, the gains extended for metals trailing the recovery in Asian equities and commodities as the positivity of the Feds move to raise the discount rate started to be absorbed, which is an indication of resuming normality to the financial sector amid continued recovery.
Meanwhile, oil is hovering around $80 per barrel while the dollar is still stable amid mid levels, though slightly lower than Friday's NY closing. This increased the appeal of precious metals even further supporting the continued bullish bias.
The metals are currently affected positively by the prevailing confidence in the market, which was reflected on the dollar and commodities. Asian indices also managed to advance well today as the Japanese Nikkei Index added 2.71% while Hang Seng advanced around 2.30%.
The fear that prevailed on the back of the IMF move to sell gold in the market started to evaporate gradually; therefore, we see that the normal trend has resumed wrapping the metals amid the heightened volatility in the market.
This upside trend that metals are trading in took gold towards 1123.90 as of 02:43 EST. Silver continued the upside move due to strong speculative demand and currently trading around 16.50, while platinum is trading around 1540.00.
With the continued dollar correction and the upside wave that oil has undertaken, metals are heading to the upside. Nonetheless, we should be aware of the sudden break in the sentiment and the resurfacing of pessimism amid the fragile conditions which will take metals south once again.