Gold retreats a bit after the slight wave of relief
The shiny metal declined today after the opening in the Asian session, extending the losses recorded in the past session, cutting some of the huge gains recorded during the week. The yellow metal is currently affected by mixed data and sentiment in the market; however, after the heavy fluctuations seen yesterday the metal closed in New York at a loss.
The yellow metal retreated today after the opening of $1763.87 per ounce, recording the high of $1768.15 and the low of $1746.27, and is currently hovering around $1759.67 an ounce.
Volatility is dominant and seen widely across precious metals market, and now we can see gold is declining, after fluctuating heavily yesterday, gold eased after CME group, the world's largest gold futures market, raised margins on gold futures by 22.2% in order to reduce demand for gold by making it less attractive. Today, the yellow metal resumes the downside movement after regulators in France, Spain, Italy and Belgium announced that ban on short-selling starting from today, in attempts to stabilize markets.
The shiny metal is still stable above $1730 per ounce, where the downside movement is limited due to the fragile sentiment that is dominant in the market due to the downbeat global growth outlook, the European debt-crisis and finally high inflation levels worldwide, which support investors to hold the yellow metal in order to protect their wealth as a safe haven and as a hedge against inflation and uncertainty.
The upbeat U.S. jobs report yesterday supported gold to extend the limited downside move, after the report showed that the initial jobless claims retreated to 395k from the previous of 400k and beyond the expected estimate of 405k. However, we can see more data released yesterday in the world's largest economy showed U.S. deficit unexpectedly widened, which limited the downside correction on gold.
The French President, Nicolas Sarkozy, called the government for an emergency meeting after the spread rumors that France's credit rating is under pressure and could be downgraded. After the 2-hour meeting, Sarkozy ordered his finance minister to find new measures in order to lower the nation's debt and to reduce the budget deficit, where the plan is needed within a week. The fear remains evident especially after the French economy stalled in the second quarter according to data released today following 0.9% expansion which will increase the pressure on the French government.
We can see silver has also declined today after the opening in the Asian session, extending the losses recorded in the past session, where after the heavy fluctuations seen yesterday the metal resumes the bearishness and is currently trading around $38.51 per ounce; the metal also recorded the high of $38.87 and the low of $38.37 after the opening of $38.65 an ounce.
On the other hand, platinum continues to incline to overbeat the yellow metal and returns to trade higher, where platinum inclined today after the opening of $1782.00 per ounce, recording the high of $1795.00 and the low of $1775.00 and is currently hovering around $1794.00 per ounce.