Gold extends the losses amid the slight optimism seen in equities
Gold declined sharply today after the opening of the Asian session, extending the losses incurred in the past three sessions, where the shiny metal is affected by the slight wave of optimism seen in the market, after the upbeat news form the world's largest economy yesterday, which supported stock markets, as we can see all main equities' indexes are trading in green, which forced the metal yesterday to decline sharply eliminating the gains recorded during the Asian and European sessions.
Gold opened the session today at $1758.40 an ounce, and recorded the highest at $1766.35 and the lowest at $1724.35, and is currently trading around $1725.00 per ounce.
Moreover, CME moved yesterday and raised margin requirements on gold futures to 27% from 22%, where this move came after the first increase failed to control the rapid incline in gold, where the entity increased margin requirements two times during this month in order to stabilize markets, forcing more downside pressures on the metal to trade lower.
Yesterday, the world's largest economy released the closely watched durable goods orders index for July, where orders expanded by 4%, better than the revised previous drop of 1.3% from 2.1% and above the expected estimate of 2%. In addition, the durable goods orders excluding transportation unexpectedly expanded by 0.7% better than the adjusted previous of 0.6% from 0.1%, and above the expected drop of 0.5%. This unexpected improvement in the world's largest economy supported the metal to give up the gains recorded yesterday during the European and Asian session and to record big decline in New York session.
Shanghai Gold Exchange increased the margin requirements on gold futures for the second consecutive time in the same month as CME did, also in attempts to control the rapid incline in the yellow metal. The entity raised margins to 12% from the previous of 11% starting from yesterday's settlement, where the entity tends to reduce risks and stabilize markets along with protecting investors' interests.
CME and Shanghai Gold Exchange succeeded to lower the metal, while flow of upbeat fundamentals forced more pressures on the metal to extend the losses and weakened the positive momentum; however, downbeat fundamentals from Europe and U.S. could support the yellow metal to recover the losses, but in fact to set new historical record.
Volatility and heavy fluctuations are expected today, with lack of fundamentals from Europe, awaiting the critical jobs figure from the U.S. today, with hopes that upbeat figures could support confidence in the market and extend the wave of optimism seen after investors hold less gold now as demand for safe haven declines.
Silver also declined today, extending the huge losses seen in the past two sessions, where after the opening of the Asian session at $39.67 per ounce, the metal recorded a high of $40.37 and a low of $39.21, while silver is currently hovering around $39.37 per ounce.
Platinum slumped sharply today after the opening at $1873.00 per ounce, where the metal reached a low of $1810.00 and is currently hovering around $1830.00 per unce.