Gold advances as a hedge against uncertainty
Gold surged today after opening the session, recovering some of the losses recorded yesterday, affected by rising demand for the metal as a hedge against uncertainty, awaiting the critical vote from the German parliament on the expanded powers of the European Financial Stability Facility.
The yellow metal opening the Asian session today at $1608.30 per ounce, and recorded the highest at $1633.67 and the lowest at $1582.37, and is currently hovering around $1625.65 per ounce, yet once the German Parliament passes the proposal of expanding the powers of the European Financial Stability Facility and cheerful fundamentals were seen, the metal should reverse lower; however, mixed data from major economies could also trigger heavy fluctuations and volatility.
Moreover, the metal is affected by the weakening U.S. dollar, which has forced pressures on the metal over the past period, where gold as a normal commodity, gold inclined against the low yielding currency that is currently cutting the gains recorded yesterday.
The U.S dollar index (USDIX) opened the session today at 78.03, and then recorded a high of 78.15 and a low of 77.62, and trades now around 77.70.
On the other hand, the volatility seen in the market led investors to hold more gold as a safe haven due to the awaited heavy fundamentals from Europe today, where Germany is to release the unemployment figures for September, while the United Kingdom is to release the money supply figures and mortgages approval and finally the euro zone will unveil confidence indicators.
Major fundamentals are also awaited from the world's largest economy and Japan, where the first is to release the gross domestic product figures in addition to the jobs report, while Japan is to present the inflation level along with unemployment figures.
Those heavy fundamentals from major economies worldwide should shift investors' focus to the downbeat growth outlook and the faltering recovery again, where some of the data could reflect or give indications regarding next steps and movements taken into consideration by central banks and lawmakers to support the fragile confidence and ease jitters in the market.
Among other precious metals, silver also advanced today as the weakening dollar supported commodities to trade higher, where after opening the session at $29.75 per ounce, the metal set the highest at $31.15 and the lowest at $29.05, and is currently trading around $31.00 per ounce.
On the other hand, platinum slumped after the opening of $1529.50 per ounce, to currently trade around $1526.18. The metal recorded a high of $1547.75 and a low of $1505.02 per ounce.