Metals head higher on haven demand
Metals inclined yesterday noticeably yet this time was alongside the dollar's decline as the shining metal was demanded for haven against the prevailing uncertainty across financial markets and over the outlook. The deficit crisis which Greece in the center, the volatility of the data and uncertainty over Central Bank's next move all fueled risk aversion and intensified haven demand.
The S&P GSCI Index declined yesterday by 10.25 points while RJ/CRB index lost 3.87 points; the DJIA ended as well red, after compensating some of its losses in the latter half of the session to settle down by 0.51%. Nonetheless, we see that metals managed to shine yesterday.
Some have their reservation over the term haven investments, as economically it is not an accurately sound terminology. Yet in the science of financial markets and the art of investment, it is merely an explanation to investors' behavior, and we all know that metals are the perfect resemblance of that notion, especially gold that withholds its value powered by its physical shining property!
Yesterday, gold ended in NY higher by 0.86% to settle at 1106.60, while platinum added 1.53% to close at 1531.00 and silver closed at 16.10 higher by 0.81%.
As for today, metals are still biased to the upside so far, where as of 02:44 EST gold was trading at 111.70 higher by 0.46%; while sliver trading around 16.15 higher by 0.31% and platinum traded around yesterday's closing in NY at 1531.00.
The improvement witnessed across the global economy managed to overshadow some of the pessimism the prevailed most of this week, with expectations that the recovery is loosing momentum and the bubbling deficit crisis in Europe. This confusion is the driving reason behind the volatility, the conflicting data and sentiment is driving investors to grow more uncertain and increase their demand for haven and stability.
The dollar's appreciation took the infamous dollar index towards levels not seen since about June of last year, and despite that gold is holding its ground around 1100.00 per pounce, and if that shows something, is that the gold withholds its bullish headings and nothing was capable to pressure it enough to steady below the 1000.00 areas despite the anticipated volatility that is still expected to control the market!