Gold advances today after the downbeat retail trade figures from Japan

Gold surged today after the opening of the Asian session, recovering some of the losses recorded in the past session, where yesterday the shiny metal slumped as we expected during New York session affected by the upbeat personal spending and income figures, however, the metal return to advance slightly today after the sluggish retail sales along with rising jobless rate in Japan.

Gold advanced today after opening the session at $1788.30 per ounce, recording a high of $1800.40 and a low of $1785.00, and is currently hovering around $1796.91 per ounce. We should mention that the upside movement could be limited today due to the slight optimism seen; as we can see Asian stocks extended the gains for the fourth consecutive session.

Japan released the seasonally adjusted retail trade for July, where the index unexpectedly dropped by 0.3% from the previous of 2.9% and below the expected expansion of 0.5%. Moreover, Japan also released the jobless rate for July, where the index rose to 4.7% from the previous of 4.6% and worse than the expected steady rate of 4.6%.

The worsening economic conditions in the world's second largest economy added more pressures on the markets, leading investors to hold more gold today, BUT the effect could be limited and the shiny metal could reverse to the downside, in case some cheerful data could support the slight wave of optimism and the slight better confidence in the market.

However, gold could extend the downside movement which started yesterday, especially after the slight wave of optimism seen in stock markets, which eased the jitters and tension in the market, leading investors to hold other high yielding investments, especially after margin requirements on gold futures were raised by CME and Shanghai Gold Exchange twice during August, which affected the metal's attractiveness.

In Europe, we can see that the Italian Prime Minister, Silvio Berlusconi along with the Finance Minister, Giulio Tremonti, approved the adjustment to the new austerity package worth 45 billion euros, which is demanded by the European Central Bank in order to support Italy's bonds and will be voted on by the Senate next week, where the Prime Minister and the Finance chief reached to this decision after a 7-hour meeting with officials of the northern league.

This act reflects the serious actions taken by Italy to stop the debt crisis from expanding further, in addition, the country aims to reduce the large debt and to reduce the deficit during by the next two years in attempts to avoid requiring bailouts, knowing that Italy has the second largest debt in Europe.

As we noticed before, the European debt crisis has forced enormous downside pressures on the pace of growth not only European growth, but also major economies worldwide. Moreover the crisis also delayed the pace of recovery, and supported the shiny metal to incline sharply during the past period as we witnessed gold broke records more than 10 times in July and August.

Among other precious metals, silver declined today extending the losses recorded in the past session, where after the opening of $40.85 per ounce, the metal retreated to a low of $40.34. Silver also reached a high of $40.88 and is currently hovering around $40.60 an ounce.

Platinum also retreated today after the opening of the Asian session at $1838.00 per ounce and recorded the highest at $1840.00 and the lowest at $1822.00, and is currently trading around $1828.00 an ounce.