Profit-taking pushes gold downward in Asia
After climbing to its highest in over a month, investors to engaged in profit taking and locked in on their profits sending metals lower. Today we see metals retreating in morning trading as the dollar gains ground.
Investors were discouraged to take risks today as the dollar index climbed steering investment away from basic commodities; investors tend to avoid commodities and risky assets amid shaky confidence levels across markets.
Gold fell to a low of $1126.60 in Asia after reaching a four week peak of $1133.27 yesterday. Silver on the other hand gained 22 cents climbing to $18.11, whereas copper added 5 cents trade at $363.
Yesterday gold rocketed to its highest reading since 8th March to record $1133.27 per ounce, fueled by positive data released from the U.S. that spread optimism throughout the market. The ISM Services confirmed the correct rout the American services sector is taking by making the biggest advance since May 2006, with services contributing to around 90% of the world's largest economy that is seen as to be on the path to complete recovery. The advance in the services sector was fed by the improvement in the labor sector that added 162 thousand new jobs.
Platinum soared yesterday to a two year peak of $1708.60 pushed by the confidence wave that engulfed financial markets, with reigning anticipation of a complete recovery from the worst recession since the great depression. This ought to boost platinum which is a basic component in auto construction and industries.
Oil surged uphill to $86.87 per barrel the highest since October 2008, pulling gold in the same direction. The dollar acts as a bond between the two commodities, forcing gold to incline in the same direction as crude oil.
As a consequence of the Greek crisis, European investors opt gold as a safe heaven, particularly now in the time of low confidence in financial markets once again regarding Greece. This was seen last year with the recession reaching its most sever levels since the 30s, as gold along with other precious metals is used as a haven in harsh economic times.
Yesterday the S&P GSCI index close at 546.56 after ascending 8.84 points, while the RJ/CRB index for basic commodities raked in 3.08 points to close at 276.43.
Gold futures for June settlement appreciated by $7.60 to reach $1133.70 in New York evening, as they peaked at $1134.80 and recorded a low of $1120.80. Currently gold is trading around $1128.65 as today it climb up to a high of $1132.55 and down to a low of $1112.60.