Gold may extend yesterday’s gains

Gold is trading within narrow levels today, but could extend the gains seen yesterday, where concerns are still dominating markets regarding the European debt crisis and accelerating inflation.

In Europe, the Greek debt crisis remains the highlight in the zone, where finance ministers are trying to come up with a solution regarding the crisis as they still differ over the extent of investors' involvement in the bailout package for Greece. Uncertainty and the current economic situation in the zone led investors to demand precious metals as a safe haven, especially gold while the euro returned to soften versus its major partners.

Another reason for gold to extend the gains is the status quo as a hedge against inflation; China, India and Australia are facing inflationary threats as the released data yesterday showed accelerating inflation raising doubts and concerns in markets, where China raised the reserves requirements after it has increased the interest rates for four times since the last September in order to contain high levels of inflation.

In Australia rising prices and high inflation caused by the natural disasters, could hurt the economy unless the reserve bank of Australia would step in to introduce new measures in order sustain the recovery, where the Governor of Reserve Bank of Australia, Mr. Glenn Stevens, said that the Bank might raise interest rates in the coming period.

The dollar is inclining today after two days of losses, where eyes on the heavy data to be released later today including the CPI from the United States, which is expected to stay unchanged as the economy showed stability in the past month regarding the Core CPI for the world's largest consuming nation; the CPI is expected to incline by 0.2% due to rising energy and food prices.

Gold inclined today after the opening of $1523.61 to reach the peak of $1527.25 per ounce, and then declined to record the low of $1522.90 per ounce, where it is currently trading around $1523.24 per ounce.

Sliver started the Asian session with the opening of $35.35 per ounce, and is also trading within tight levels, where it surged to the high of $35.68 and slumped to the low of $35.28, and is trading now around $35.32 per ounce.

Platinum futures declined too, where the metal opened the trading at $1798.60 per ounce, and recorded the high of $1804.00 and the low of $1795.20 per ounce, and currently trading around the lowest range at $1795.20 per ounce.