Gold rebounds today ahead of ECB and BoE rate decisions
Gold inclined today in the Asian session, recovering some of the losses recorded in the past sessions, where demand for gold surged today ahead of the European Central Bank and Bank of England rate decisions, where investors are anxious awaiting the moves from the banks to stimulate growth and revive the recovery.
Gold advanced today after opening the Asian session at $1817.15 an ounce, recording a high of $1845.80 and a low of $1813.45, and is currently trading around $1839.57 per ounce.
Moreover, some weak fundamentals from the Asian region have added some more jitters to the market today and supported the shiny metal to rebound, as the Australian unemployment rate surged to 5.3% from 5.1% in August, in addition, the economy pulled 9.7K jobs, while expectations signaled that the economy added 10K jobs.
Demand for precious metals in general surged today as investors seek safe havens ahead of the ECB and BoE rate decision, where after the slight optimism seen in equities yesterday, investors return to demand safe heavens amid the current economic conditions, where high volatility is expected today.
Furthermore, German exports unexpectedly dropped today by 1.8% from the prior drop of 1.2%, but worse than the expected expansion of 0.5%, which added more pressures on Germany as the trade surplus retreated to 10.4 billion euros from the previous of 12.7 billion euros, reflecting the European debt crisis and slowing global growth effects on the zone's largest economy.
Yesterday, German Federal Constitutional Court rejected lawsuits to block Germany from participating in euro zone bailouts and in forming the European Financial Stability Fund, which eased some of the jitters in the market, however all eyes will be focused today on the ECB and BoE, after the Swiss National Bank has set minimum exchange rate for the Franc against euro at 1.20 in order to control the rapid franc appreciation, which hurt the economy and the nation's export.
In case ECB and BoE took further steps into considerations and used the tools to stimulate growth, a negative reflection should be seen on the yellow metal to trade lower.
In Italy, the austerity measures passed through the senators yesterday, and now the proposal of more than 50 billion euros budget cuts and austerity measures should be granted by the house of deputies in a final vote, where Italy seeks to reduce the huge amount of debt that the nation handle, in attempts to avoid the expansion of the debt crisis within the country.
Later today, the U.S. President, Barrack Obama is expected to give the jobs speech, as the president might proposed to inject $300 billion to revive the economy and support labor market, as those funds would aim at tax-cuts and infrastructure projects.
The incline seen on the metal today is driven by the heavy fundamentals and moves in the market today, where investors are tensed and held more gold as a safe haven waiting for moves by central banks and lawmakers, as more steps in Europe to overcome the debt crisis could pressure gold lower.
Silver also inclined today amid surging demand for precious metal, where the metal opened the session today at $41.50 an ounce, and recorded a high of $41.92 and a low of $41.26, and is currently trading around $41.68 an ounce.
Platinum also climbed slightly today, as the metal opened the session at $1831.00 an ounce, and reached a high of $1833.00 and a low of $1815.00 and is currently hovering around the intraday high.