Gold declines for the second day amid the slight optimism seen in Equities
Gold retreated today after opening the Asian session, where the metal is mainly affected by the slight wave of optimism seen in the Asian equities, where the Asian main indexes rebounded to the upside and are trading in Green today after the losses seen in the past sessions, which reflected less demand for the shiny metal.
Gold retreated today after opening the Asian session at $1874.75 an ounce, where the metal extended the losses recorded yesterday, as gold slipped from all-time record. The metal recorded a high of $1880.02 and a low of $1827.50, and is currently hovering around $1849.79 per ounce.
Gold extended the downside movement, as we can see the metal is trade lower today, however the general sentiment is still pessimistic, while fears and jitters are still dominant in the market, and we expect the metal to resume the upside journey unless Europe overcomes the debt crisis and U.S. lawmakers take further steps to beat the rising challenges, while eyes will be focused on the president Barrack Obama jobs speech tomorrow, where the president's statement may include hints and clues regarding the Fed's next moves, after the downbeat non-farm payrolls last Friday. The president could also provide some plans and proposals to boost jobs growth, by providing the economy with more funds.
Moreover, the Australian gross domestic product figures expanded today beyond expectations by 1.2% from the previous drop of 1.2%, which reflected some improvement in the Asian region. In addition the Bank of Japan has kept interest rates unchanged today, in order to stimulate growth further and to support the recovery in the country, which started to rebound after the disaster that hit the nation in March.
Furthermore, the Swiss National Bank intervened yesterday and set a minimum exchange rate for the Swiss franc against the euro at 1.20 in order to stop the rapid appreciation seen on franc, which hurt the Swiss economy and the country's exports. This move from the central bank reflected some optimism in the market, as investors recognized that central banks in Europe and in the world as whole will intervene and could take further steps and use the different tool they have if need to stimulate recovery and to support growth to improve in the second half of this year.
As we noticed, demand for safe havens retreated today after the optimism seen in the Asian equities, where the U.S. dollar also slumped today along with the yellow metal, while investors tend to invest in stocks instead of precious metals and low yielding currencies.
German Finance Minister said yesterday that Greece should apply the austerity measures as soon as possible in order to get the second bailout package, as the Greek finance minister pledged to quicken the steps needed to apply the austerity measures.
Furthermore, Italian streets face general strikes for the third day as the Italian cabinet approved the Austerity measures of 45.5 billion euros, awaiting the vote of confidence from the senators today, and as the senators approves the package, the package should be sent for the Chamber of Deputies for a final vote during this week.
We can see the serious steps taken by European nations to prevent the debt crisis from expanding further, where Greece, Italy and Switzerland have made some progress till now, which eased jitters and rising concerns for a while awaiting more moves from central banks and government to control the debt crisis, which eased demand for the yellow metal today.
The European central bank is to release the rate decision tomorrow, which will be the week's main event in Europe, as we expect the central bank to cut rates to support the recovery pace and support growth.
Among other precious metals, silver declined today extending the losses recorded in the past sessions, where after the opening of $41.97 per ounce, the metal rebounded slightly to the upside reaching a high of $42.18 and then retreated to a low of $ 40.39 is currently hovering around $41.47 an ounce.
Platinum also declined today, as demand for precious metals and low yielding currencies retreated, where after opening the session at $1870.00 per ounce; the metal surged to a high of $1878.00 and recorded a low of $1855.00, and is currently trading around $1860.00 an ounce.