Gold recovers the losses as a new week begins
At the beginning of this week, precious metals are biased to the upside, as we can see gold recovered all of the losses incurred on Friday, while silver and platinum are positively biased and recovering now most of the losses, especially after the upbeat jobs report from the world's largest economy on Friday.
Gold opened this week session in Asia at $1638.76 per ounce, and recorded the highest at $1661.10 and the lowest at $1637.54 so far, and is currently hovering around $1657.95 per ounce, and is expected to extend the upside movement during this week, but we recommend to keep eye on the U.S. dollar movement along with other currencies and stocks, which could provide further indications regarding the current sentiment in the market.
Over weekly basis, we can see that gold fluctuated heavily during the past week, yet closed the week with slight gains. The metal opened the past week at $1617.90 per ounce and recorded the highest at $1678.45 and the lowest at $1595.77, and closed in the New York session on Friday at $1637.60 per ounce.
We can notice the U.S. dollar's effect on gold, where the weakness seen on the dollar supported the metal to rebound to the upside today, especially after the French President, Nicolas Sarkozy and the German Chancellor, Angela Merkel pledged to recapitalize European banks -which strengthened the euro against the U.S. dollar- in order to maintain financial stability in the zone and supported the slight optimism seen in the market, which spread after the U.S. economy unexpectedly added more than 100 thousands jobs to the labor sector in September.
Angela Merkel and Nicolas Sarkozy's meeting added more uncertainty to the current situation, where both leaders provided headlines of the steps to be taken next; however, no details were provided, but in general both of the leaders agreed on quelling the jitters in the euro zone by announcing new measures to ease the Greek debt crisis, while they also agreed on the need for recapitalizing banks to secure the banking sector and also ensure that European banks have sufficient capital and liquidity.
Moreover, Germany released the trade balance and current account figures for August today, which showed that the German economy has finally rebounded slightly to the upside, where the surplus widened beyond expectations to 11.8 billion euros from 10.5 billions, while exports unexpectedly expanded 3.5% from the prior drop of 1.2%, which has supported the common currency to rebound against the dollar, and also supported European equities to open in green.
Among other precious metals, silver has also gained today after opening the Asian session at $31.11 per ounce, recording the highest at $31.98 and the lowest at $30.96, and trades now around $31.87 per ounce.
Platinum, which became cheaper than gold, has also advanced today after opening the Asian session at $1493.75 per ounce, and then recorded a high of $1521.50 and a low of $1488.50, and trades now around $1496.00 per ounce.