Gold’s euphoria settles it around its all time highs!
Gold advanced further today after the decline recorded yesterday which is merely insignificant considering the general bullish trend for the shiny yellow this year! Investors continue to demand gold as a safe haven from ongoing uncertainty in markets highlighted by the European debt crisis. Further woes are now stemming over the outlook for the pace of the global recovery especially with China's probability to move for further monetary tightening with rising inflation which all weighs negatively on the outlook for the global recovery.
Gold declined yesterday by 0.36% to end in NY at 1232.60, which was after the metal managed to rebound off its lows recorded around 1226.60 consolidating above previous historic highs. Silver and platinum also declined, where the former ended at 1731.00 down 0.35% and silver settled at 19.43 down 0.46%.
The decline seen yesterday resembled the trend in the market, as profit taking sent metals down where they met new demand, as investors continue to buy on dips and not sell on highs, which is a clear bullish sentiment for metals.
In the Asian session today, gold returned to the bullishness where it was trading higher by 0.21% around 1235.20 around 02:42 EST. Silver was also higher at that time by 0.15% around 19.46 nonetheless platinum broke lose of the trend and was down 0.58% to trade around 1721.00.
Anxiety over further monetary tightening from China and the downside weight it will have on growth limited demand on platinum due to its linkage and nature as an industrial metal. Accordingly, the speculative demand did not manage to work the bullishness for the metal and focused on the weaker outlook for demand.
Commodity indices suffered losses yesterday amid the continued dollar appreciation, which weighed on commodities negatively. US indices as well declined which offset risk appetite and was further bearishness on oil which fell below $74.00 per barrel.
Nonetheless, the general trend in the market for metals remains bullish, and for the shiny yellow in particular settling above 1226.00 might introduce more upside movement and new all time highs. Though we should be cautious today with the week-end trades which might trigger profit taking and position squaring though we do not at all see its potential threatening to alter the allover bullishness for gold especially as ongoing market uncertainty is only growing and not stabilizing!