Demand on gold retreats as pessimism dominates financial markets
Global indices sealed last week's trading with a huge slump, where Asian markets extended the losses today despite the lower volume with the absence of Japanese markets.
Stocks in Europe and the U.S. closed Friday's session lower, as the earnings from the U.S. failed to support financial markets and spread pessimism among investors due to the disappointing results that was presented by companies regarding their performance during the past three months.
The DJIA closed lower by 2.52% as it lost 261.41 points to close at 10097.00, the S&P 500 lost 31.60 points or 2.88% to close at 1064.88 levels, TheNASDAQ Composite Indexdeclined 70.03 points or 3.11% to close at 2179.05 levels.
Confidence in the U.S. slumped severely in the preliminary July Michigan estimate, which strengthened pessimism among investors, meanwhile gold trading was not affected by last week's inflation report that was released from the U.S., showing that inflation remains subdued in the U.S; accordingly, a selloff on gold was witnessed throughout the past week as the precious metal is considered the perfect hedge against inflation, but with no inflation threats currently surfacing, investors turned bearish on gold and focused on low yielding assets as a safe investment.
Shifting to low yielding assets caused the dollar to extend the rise against majors, where it is witnessed on the U.S. dollar index, which measures the performance of the dollar against a basket of currencies, where the index last traded at 82.766, compared with the opening levels of 82.660, Noting that the index reached the highest at 82.80 and the lowest at 82.58.
Gold typically move in an inverse relationship with the Dollar, accordingly, the precious metal is extending Friday's slump, where trading opened today at $1193.40 an ounce, meanwhile gold is trading at $1191.35 an ounce, where it managed to reach the highest levels for today at $1193.50 an ounce and a low of $1190.45 an ounce.
The REUTERS/JEFFERIES CRB INDEX shed 0.753% to trade at 262.220 where the index managed to reach the highest levels for today at 264.80 and the lowest at 260.87.
As for other metals, Silver prices followed the same pattern of the precious metal where Silver prices declined in today's trading reaching $17.75 an ounce compared with the opening levels of $17.81 an ounce while it managed to reach the highest point at $17.88 an ounce and the lowest at $17.73 an ounce; meanwhile Platinum, which is the world's most expensive metal, gained so far in today's trading by $8.0 or reaching $1512.0 an ounce while Palladium inclined where the metal added $9.0 in today's trading session where it's currently trading at $453.00 an ounce.
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