Great fluctuation in precious metals' markets
Trading during the past period has mostly evolved into speculation on investment assets, debt instruments and several metals. Speculation has taken the form of open selling for profit-taking. Precious metals have lost some of their value due to profit-taking and lack of speculation in their market.
Fear crept back into the markets concerning with the Greek crisis and large deficits in several other European countries. American stock markets slipped yesterday, while today Asian markets trailed their bearishness. The Dow Jones closed with a loss of 1.08% while Nikkei dropped 0.54% today.
Commodities showed no unity as S&P GSCI fell slightly by 0.43 points and closed at 486.96. Demand on oil dropped with declining prices, as crude continues its steep downward movement for the seventh consecutive day to trade around $68 per barrel.
Yesterday in New York, gold recorded a low of 1207.30 before climbing to close at 1223.00 with a decline, while in electronic trading, the yellow metal reached 1206.00. Platinum has also descended by 0.12% to close at $1667.00 in New York.
At 2:34 EST gold is trading at 1211.10 down by 0.97%, while platinum has lost 0.06% so far and is trading at 1666.00, as metals continued their downhill movement today. Silver had fallen sharply today after the yesterday's upward movement, as it is trading at 18.62, declining by 1.95% from yesterday's closing 18.99.
Speculation is the main characteristic for precious metals at this period. Descending oil prices and a stronger dollar have ensued strong waves of profit taking, leaving gold unable to sustain the record 1249.00 it reached.
Precious metals markets were no exception, as they showed great turbulence along with other markets around the world. The short and medium term trends remain bullish, but great fluctuations are expected over intraday basis due to speculation and profit-taking.
Metals are still pushed upward by demand for safe haven, however this effect has succumbed to speculative and profit-taking, inflicting great fluctuation in the market and occasional bearish corrections.
The euro welcomed the aid package received by Greece yesterday with an upward leap, however it has moved in the opposite direction today despite European Central Bank's announcement of possible backing for the sixteen nation currency. This depreciation of the currency may prompt demand for gold as a safe haven and a cover against the falling currency.