Profit taking waves greet the US labor report in the precious metal market
Precious metal continued their free fall yesterday after the release of the US data, while awaiting today's infamous labor report which is expected to show clear signs of improvement. In general, precious metals were under the mercy of speculators who ensued in intense profit taking as the week comes to an end. Though the data released in the U.S. was below expectations, it still managed to reflect the recovery in the economy and more stability in the Housing sector, which is why investors were keen to abandon the golden safe haven.
Today's labor report is expected to show a decline in unemployment and 520 thousand new jobs added. While Canadian unemployment is expected to fall and the euro zone GDP is expected unrevised at 0.2% expansion.
Gold fell by 1.32% in New York yesterday as it closed at 1207.80 under the influence of speculation. Silver followed the same path closing at 17.95 after dropping by 2.13%, while platinum lost 0.77% of its value and closed at 1543.00.
Being an industrial metal, platinum incurred the least sever losses amidst rising commodity indices. The S&P GSCI added 7.03 points to close at 490.01 as the RJ/CBR reached 254.89 raking in 1.95 points. Most of the speculative forces affecting platinum had been shaken off when the metal dropped from 1750.00 levels, which is one of the reasons behind the small scale of platinum's drop compared to that of silver.
Gold fell from 1219.75 to 1215.00 in the London Fixings, while on the other hand, platinum had ascended from 1563.00 to 1565.00. This is additional evidence that investors are abandoning the golden safe haven.
Precious metals continued their decline today, sided by Asian stocks. At exactly 01:47 EST the yellow metal is trading at 1202.80, while silver has descended by 0.33% to 17.89 and platinum is repeating yesterday's stubborn resistance against the downside force as it has dropped only 0.19% so far to 1540.00.
A CitiGroup has pointed to a possibility of gold climbing to 1500.00. Other reports foresee the 1300.00 threshold in the near future. However over intraday basis, we expect high fluctuation and don't exclude the possibility of further downward movement while investors await the labor report from the U.S. Though, the medium and long term expectations are still bullish amid current economic conditions and level of uncertainty in the markets. The Greek crisis, stifled growth in some countries and overly fast growth in others to the extent of inflationary threats are pushing the yellow metal upwards.
The negative wave that has swept silver and platinum is a result of deteriorating industrial sectors in the world and investors' fears of tightening credit policy, as in the case of China, Australia and Canada. However, if the industry is able to recover we might see an improvement in these two white metals.