Fears dominating precious metals bulls
Precious metals are aiming at a bullish trend during this week, but fears and concerns are controlling demand for precious metals following the heavy profit taking wave and selloff seen in the past period.
The metals are facing strong selling pressures when investors notice their inability to continue the bullish trend. News indicated that hedge funds and large investors locked on their profits and saw the need for correction as they lost the bullish momentum.
Famous players in the financial markets, such as the billionaire George Soros, who indicated that precious metals are in a bubble, indulged in heavy profit taking on gold in his portfolio, which is one of the large hedge funds worldwide.
The fact that large investors in the financial markets sold gold and precious metals, kept the bulls concerned about the repeated huge selling waves, so yesterday we witnessed precious metals declining again after the upside move.
During New York session yesterday, gold rose to the highest at $1503.60 per ounce, but then declined sharply to close near its lowest at $1498.80 per ounce. Platinum trended inline with gold, where it declined by 0.68% to close at $1753.00 in New York yesterday. Silver fluctuated sharply, more than gold and platinum, which caused a big drop yesterday, where the metal fell 4.82% to close at $33.60 per ounce after it reached the highest at $35.17.
Financial markets are very tensed and trading with high volatility because of the European debt crisis; also we see concerns of a sharp decline in the performance of the global economy affected by the mixed and subdued performance of the U.S. economy, the disasters in Japan, the momentary tightening in China and the European debt crisis.
For inflation, the RBA indicated today that the aussie's appreciation during the past period limited the rise in inflation, but in fact we see that inflation in Australia is concerning.
In China inflation levels are also high, for Europe, inflation is stabilizing above the ECB's target, that we witnessed a rising CPI in Europe reaching 2.8% on the year in April.
We think that precious metals are still qualified for a new bullish wave, especially gold, but concerns hovering in the markets and worries about another huge profit taking wave are suppressing the bullish waves, but sooner or later, in case that the ongoing economic circumstances stayed as they are, we could see a bullish trend controlling the metals and gold rising once again.
Gold is currently trading around $1434.80 per ounce higher by 0.34%, while silver rose by 1.82% to trade now at $34.21 per ounce; also platinum inclined by 0.80% and is trading at $1767.00 near its highest in New York yesterday. These prices as they are as of 2:23 AM EST (6:29 AM GMT).