Gold rising on inflationary threats in China and markets uncertainty
Today, gold inclined at the beginning of the Asian session after the heavy data released by Japan and China, which is the world's largest gold producer, where the Chinese consumer price index is still too high, the CPI came as expectations rising from the prior reading by 0.2% to an annual 5.5% in May.
The Chinese CPI remained in line with expectations at 5.5% though quickened from the previous 5.3%, while industrial production slowed less than expected which surprisingly supported the market, where the focus now is on growth and not worsening inflation, which in role buoyed gold gains on inflation hedge.
Also the BoJ left rates steady as expected and provided a new 500 billion fund for banks to stimulate the economy which also supported the metal on fears of money flood in the market. From Asia as well India reported a continued rise in inflation pressures which kept gold shining as a hedge against rising price pressures.
In Europe, Standard & Poor's lowered Greece credit rating to the world's lowest, where the agency said that Greece maybe forced to default, this adds more pressure on the European Union and the single currency as the finance chiefs continue their debate over how to salvage the nation and provide the new package with a wide rift in views over investors participation. The euro is inclining today against the dollar in spite of the downbeat news of lowering Greece credit rating, where the euro is rebounding to recover from the losses recorded in the past week.
The dollar is declining for the second consecutive day, supporting the gold to incline. Today investors awaiting heavy data to be released in the U.S. including the critical PPI index and retail sales report, where the PPI and the retail sales are expected to show the slowing pace of spending levels, which will keep investors jittery about the outlook for the recovery.
Gold is demanded as a safe haven in the times of bad economic situation, where concerns are dominating markets regarding the global economic recovery, high food and commodities prices in general, the European debt crisis, and finally inflationary threats and political instability in the Middle East and North Africa, all of the ongoing conditions that currently face the market in addition to the concerns regarding the future of the global economy is still upside support for the metal despite our expectations for the volatility to continue with the metal closer to $1,500 areas after the failure to breakthrough $1,550 per ounce.
Gold surged today after the opening at $1515.72 per ounce, recording the high of $1523.85 and the low of $1515.00, and is currently trading around $1519.41 per ounce.
Silver spot price increased today at the opening in Asia, where it started the session at $34.74 per ounce, it achieved the high of $35.19 and the low of $34.73 per ounce during the session, and is currently trading around $35.00 per ounce.
Platinum also inclined today after the opening at $1799.80 per ounce to achieve the high of $1810.90, it recorded the low of $1797.30, and it is currently trading around $1810.70 per ounce.