Gold advances, eyes on the jobs report from U.K
Gold advanced today after opening the session in Asia, recovering the losses incurred in the past session, awaiting the jobs report from the United Kingdom, which is expected to add further confirmations to the sluggish pace of growth and the faltering recovery in the Kingdom, especially after growth eased to 0.1% in the second quarter. In addition, the weakening U.S. dollar supported metals and commodities to rebound and trade higher today.
Gold opened at $1661.85 per ounce in Asia, and recorded the highest at $1674.60 and the lowest at $1660.18, and trades now around $1674.32 per ounce, as investors demand safe havens ahead of the jobs report from the U.K.
The claimant count rate, which accounts for the terminated employees who are claiming jobless benefits while seeking for job vacancies in the United Kingdom, is expected to rise in September to 5.0%, while jobless claims are predicted to rise by 24.0 thousands claims and finally the overall unemployment rate for the three months ending in August is expected to rise to 8.0% from 7.9% adding more challenges for lawmakers to control the worsening economic conditions, with eyes on the debt crisis effect on global growth in general and precisely on the economy of the United Kingdom.
Furthermore, with eyes still focused on Europe, the situation turned more complicated after the Slovak parliament failed yesterday to pass the vote on the expanded powers of the European Financial Stability Facility, noting the all of the nations within the zone have granted a vote of confidence and passed the new powers.
On the other hand, the Slovak parliament is expected to vote again on the powers before next week, especially when most of the parliament members didn't vote, with other 55 members agreed and 9 rejected, which trigger a failure of the cabinet, which is currently under reformation.
As agreed on July 21 by European leaders, all governments should pass the expanded powers through parliaments in order to activate the powers of EFSF, which include recapitalizing banks, bailing out debt-burden nations and buying bonds in the primary and secondary markets.
Moreover, The European Central Bank President, Jean-Claude Trichet called on lawmakers in Brussels yesterday after saying that the crisis has reached a systemic dimension, to act quickly and tackle the crisis which is expanding to larger economies within the zone.
We expect the metal to fluctuate heavily during the session today ahead of the Federal Open Market Committee Minutes, awaiting the main bulletins discussed in the feds meeting, which could include further indications regarding the next steps to be taken by policy makers in the world's largest economy.
Silver opened the session today at $31.99 per ounce, and recovered the losses incurred yesterday, where the metal is trading now around $32.28, after recording the highest at $32.36 and the lowest at $31.81 per ounce.