Gold start week’s trading gaining
Gold ascended on optimism from Europe's Stress Test results, which showed that the financial sector in the European continent is strong and that the sector will not curve recovery. Seven out of 91 banks failed, mostly in Spain, where the debt crisis in the continent continues to hammer economical activities in the country.
The week seem to have started with optimism, but rather than investors hedging to safety, where gold and low yielding assets are expected to rise, which was seen by the start of Asian session, and is projected to extended throughout today's European and U.S. session, where lack of news on the economic calendar will cause investors to target safety due to the simple fact that EU stress test performed on banks witnessed criticism where analysts believe that the tests was rather far from reality and played scenarios that were easy for banks to survive.
Safety or spurring demand: gold advanced Monday as speculation rose that a drop below $1200 in gold prices, spur demand on the precious metal. On the other hand, speculation states that gold supply might witness a drop in the upcoming period, which will cause gold to rise and touch $2000 boundaries. Gold prices peaked on June 21 at 1265.30, before it dropped throughout July where currently gold for immediate delivery's trading below 1200 an ounce.
Other factor that contributed on pushing the precious metal to trade near 1200 levels is the drop in the dollar, where the U.S. Dollar index, a gauge of the dollar's performance against six majors, dropped on the daily scale to trade at 82.37, compared with the opening levels of 82.42. the index reached the highest at 82.55 and the lowest at 82.24.
The inverse relationship between gold and the dollar boosted demand on the precious metal to force an upside trend in trading today. Gold is currently trading at $1192.15 an ounce, compared with the opening levels of $1186.95 an ounce, where gold prices reached the highest for so far at $1194.53 an ounce, and a low of $1186.70 an ounce, from the start of today's trading.
As for other metals, Silver traded higher where it's currently trading at $18.16 where it reached a high of $18.09 and a low of $18.07, meanwhile Platinum, which is the world's most expensive metal, gained so far in today's trading by $10 or reaching $1548 an ounce. Meanwhile, Palladium inclined where the metal traded $15 higher, at $474.00.
For Today's Technical points for precious metals Click Here.