Gold continues the upside trend for the third day
Gold is finally recovering from the downbeat pressures and breaking lose from the bearish sentiment and dollar allergy as it trends higher on prevailing jitters and debt woes.
Gold continued to move higher into the US session today and currently trading around $1525.86 per ounce, recording the high of $1527.49 and the low of $1513.12 per ounce. Gold also continued to trend higher rising to $1527.00 per ounce in the PM Fixing from $1520.75 in the AM Fixing and $1510.50 at yesterday's afternoon fixing.
The correction was broad over the board today with commodities rebounding leading gains across equities and giving room for currencies to correct some of the losses. The correction weakened the dollar and further supported gold's gains.
The dollar index that tracks greenback's movement versus its six major trading partners is trending lower from the intraday high of 76.35 to the low of 75.84 and currently around 75.92. The index continued to trend south with easing jitters in the market and especially with the unexpected rise in new home sales in April which buoyed the positive sentiment.
Goldman Sachs returned bullish on commodities citing the ongoing recovery and demand and especially on oil which supported gold as well as an inflation hedge. Crude oil futures for July settlement moved to the upside and currently trading bullishly around $99.42 recording the high of $99.94 per barrel recovering from early lows of $96.61 per barrel.
Gold is supported by the correction, the volatility in the market, fears over the outlook for growth, and Europe's debt crisis. The data today supported the temporary relief and the needed correction, yet for gold, the rise was seen since the outbreak of the heavy pessimism on Friday.
Investors saw the temporary relief from the unrevised German GDP at 1.5% in the first quarter and the steady IFO confidence near its record in May which eased the jitters alongside Greece's Cabinet decision for 6 billion euros spending cuts and accelerated the asset-sale plans which somehow offset some of the fear on hopes the nation will avoid restructuring.
The volatility remains strong and the uncertainty very high with the global recovery seen loosing more momentum by day and fiscal imbalances rumbling across Europe, and accordingly for now it seems that gold is getting its groove back!