Gold extends the heavy losses as this week comes to an end
Another week has come to an end, while the shiny metal is still pressured to the downside, where the yellow metal retreated today to extend the losses recorded during the week, as pressures eased in the European region, which has reduced the attractiveness of the shiny metal as demand for safe havens retreated, reflecting negative demand for precious metals in general.
Gold opened in the Asian session today at $1788.60 per ounce and recorded a high of $1791.12 and a low of $1762.42 till now, while the metal is currently hovering around $1775.50 an ounce. Over weekly basis, the metal heads towards the biggest weekly loss in more than two years, where the metal opened this week at $1860.65 per ounce, and recorded the highest at $1862.00 and the lowest at $1762.42 per ounce.
By summarizing the factors affecting the metal's movement this week, we can see that Europe remained the main focus in the market, especially after the worsening debt crisis supported the metal for long time, however, lawmakers along with the European Central Bank was able to ease jitters in the zone and spread optimism through this week.
Focusing the lights on Europe, and as a start the European Central Bank was able yesterday to provide dollar supply for European banks in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and finally the Swiss National Bank, where the Bank aimed to prevent interbank lending freeze as seen in the financial crisis by adapting three more U.S. dollar liquidity-providing operations with a maturity till the end of the year.
Moreover, the European Central Bank's President, Jean-Claude Trichet called on lawmakers today and governments today to take further steps to halt the debt crisis. In addition, Trichet also called on finance ministers, who are to meet today in Poland, to act in the same Unity of Purpose as major central banks did yesterday.
Furthermore, the German chancellor, Merkel along with Sarkozy, the French President, pressed during this week that Greece will get all the support and will not leave the euro zone, while Merkel said implicitly that Greece will not be allowed to default as she said that euro area nations will not be allowed to fall in orderly insolvency.
On the other hand, the Greek Prime minister, Papandreou was able to apply further measures to cover the shortfall, and pledged to do whatever it requires to meet the budget deficit in order to qualify his nation to get the aid package. The Swiss National Bank left rates unchanged to control the currency rapid appreciation.
Italy and Spain were able to meet the target in bond auctions, where both of the nations sold around 4 billion euros of bonds. Also, Italian lawmakers granted the proposed austerity package, in order to reduce the nation's huge debt.
As we noticed, European nations and central banks are acting in unity to solve the debt crisis and finally found a common ground, which reflected a series of serious steps to halt the debt crisis; all forced the metal to trade lower, in addition to the dollar effect, the optimism seen in Equities and also mixed fundamentals.
Silver retreated today after opening the session at $39.82 an ounce, recording a high of $39.88 and a low of $39.37, and is currently trading around $39.62 an ounce.
Among other precious metals, platinum also declined after the opening of $1799.00 an ounce, recording a high of $1803.00 and a low of $1778.00 and is currently hovering around $1785.00 an ounce.