Gold advances ahead of the BoE Minutes and FOMC rate decision
Gold advanced today, extending the gains recorded in the past session, where the shiny metal is affected by rising demand ahead of the Bank of England Minutes along with the Federal Open Market Committee rate decision.
Gold rebounded yesterday after reaching a low of $1769.40 per ounce to close New York session at $1803.32. Today, the metal extended the gains recorded yesterday, where after opening the session at $1803.37 per ounce, gold recorded a high of $1816.45 and a low of $1797.95, and is currently trading around $1811.92 per ounce.
Moreover, the metal is affected by the European debt crisis in general and Greece precisely, where pessimism is still dominating and renewed fears regarding a Greek default has supported demand for safe havens.
In addition, European main equities opened the session today in red, reflecting rising debt concerns, and renewed fears regarding the global growth negative outlook especially after the International Monetary Funds cut global growth forecasts for 2011 and 2012.
Today, heavy fundamentals are expected for U.K and U.S. major economies, where investors are waiting for the moves and steps taken by lawmakers and central banks to support the sluggish growth and to revive recovery.
The Bank of England is to released its Minutes today, where the bank left key rates and APF quantity unchanged at low records since November 2009 in order to stimulate growth and revive the recovery, where the bank faces difficult decision, where on one hand the bank aims to contain rising inflation, which is expected to reach 5% in the coming period, but, on the other hand, the bank are concerned regarding the sluggish growth and faltering recovery.
Furthermore, investors are waiting for the Federal Open Market Committee decision today, with all eyes focused on the steps to be taken by the committee to simulate growth and aid the economy, especially after the weak fundamentals seen before. The Federal chairman, Ben S. Bernanke said before that lawmakers have the appropriate tools, which will be used if needed.
On the other hand, we see the U.S. President, Barrack Obama is still facing several challenges to pass new measures and programs to control the budget deficit, where he called on lawmakers to stop acting politically and start acting in the interest of the country and support the weakening economy.
After the two-day teleconference between the Greek finance minister, Evangelos Venizelos and the European Union along with International Monetary Funds representatives, Venizelos made good Progress in attempts to avoid default and get the next installment of 2010's bailout package, the European Union said.
The finance minister said that Greece will fight to stay in the euro zone, where this is an irreversible and fundamental national choice. We acknowledge that our fiscal data and economic structures are a problem for the euro area, which we are determined to tackle once and for all.
Moreover, Greek Prime Minister, George Papandreou in a meeting today with his Cabinet, called them to press for accelerating deficit cuts to ensure the next installment of 2010's bailout package is delivered in October to avoid default.
Silver also advanced today after opening the session at $39.76 per ounce, extending the gains recorded yesterday. The metal reached a high of $40.19 and a low of $39.67 and is currently hovering around $40.14 per ounce.
Among other precious metals, platinum retreated slightly from the opening level of $1779.00 per ounce to trade now around $1777.00 per ounce. The metal set the highest at $1790.00 and the lowest at $1770.00.