Gold slumps as jitters continue to ease
Gold declined today, extending the losses recorded yesterday; where eased jitters in Europe supported the shiny metal to trade lower today along with the slight optimism seen in Equities, where demand for gold as a safe haven retreated after renewed fears eased regarding a Greek default.
Spot gold retreated today after opening the Asian session at $1819.60 per ounce, recording a high of $1826.55 and a low of $1803.95, and is currently hovering around $1811.77 per ounce.
The sentiment in the market is still pessimism in general; however, the current optimism seen is driven by the eased jitters in Europe as the French President Nicolas Sarkozy and the German Chancellor, Angela Merkel confirmed that Greece is to remain in the euro zone, where after the call conference held yesterday between Merkel and Sarkozy along with the Greek Prime Minister, George Papandreou the common currency rebounded to the upside, reflecting positivity in the market.
The Prime Minister, Papandreou in the voice conference held yesterday committed to meet the spending cuts targets required by the European Union and the International Monetary Fund to qualify his country to get the second bailout package, according to statements form Greek, German and French governments.
The Greek parliament this month approved further austerity measures to meet the deficit cut targets of 17.1 billion euros and to cover the two billion shortfalls.
Moreover, Spanish treasury is to sell four billion euros of bonds today in an auction, following the steps taken by Italy of refinancing. The Italian Prime Minister, Silvio Berlusconi proposed 54 billion euros cuts to reduce the deficits, where the plan was approved by the senates and yesterday by the house of deputies, awaiting the final approval on the plan and the procedures of implementing the austerity measures.
As we notice, Europe remains the main focus in the market, as the debt crisis affected the global pace of growth and weighed on recovery and expanded more than expected, however, we can see some serious steps and efforts from the European nations to overcome the debt crisis and return positivity into the market after pessimism dominated markets for so long. Gold gained on the debt crisis big time and set several all-time records and still the European debt crisis could support the shiny metal further in case it returns to worsen and deepen.
Critical fundamentals are to be released today, where the Swiss National Bank is to announce rates decisions, while the euro zone is to release the inflation index and U.K will provide the retail sales figures. The world's largest economy will also release inflation indexes along with weekly jobs report.
Volatility and fluctuations are expected today amid the mixed sentiment in markets, where the slight optimism could be affected by any negative sign; however, gold is expected to remain negative today.
Silver also declined today after the opening at $40.66per ounce, extending the losses recorded yesterday; the metal is currently trading around $40.24 per ounce around the lowest intraday record at $40.18 while the metal reached a high of $41.73 during the session today.
Among other precious metals, platinum declined slightly today after opening the session at $1822.00, recording a high of $1823.00 and a low of $1814.00, and is currently trading around $1818.00 per ounce.