Gold trades within narrow levels with lack of fundamentals today
As a new week begins, gold is trading within narrow levels since starting the Asian session, with poor fundamentals awaited from major economies today. The metal is moving slightly awaiting the European leaders' summit on October 23, especially after G-20 called on leaders to act quickly and firmly to tackle the two-year debt crisis in Europe, awaiting the plan to empower banks and support Greece to contain the debt in attempts to prevent the expansion of the crisis to highly indebted economies in the zone with all eyes focused on Italy and Spain.
Gold started this week at $1682.20 per ounce, and fluctuated within narrow levels, recording the highest at $1691.52 and the lowest at $1676.12, and is currently trading at $1690.33 per ounce.
Gold could be very volatile and could also fluctuate heavily during this week, especially when the current economic conditions remain highly uncertain, while eyes are focused on Greece, awaiting the moves by European leaders to aid the nation and implement the expanded powers of the European Financial Stability Facility.
We see the slight optimism seen in the market could support the metals to incline today, especially when optimism means that the U.S. dollar will retreat, as demand for safe havens slump and investors' appetite for risk improves, as we can see all European equities are trading in green, which forces upside pressures on precious metals to trade higher and also on the dollar-denominated commodities such as crude oil.
Confidence is still fragile in addition to the predominant jitters and debt woes; however, the main focus remains on European leaders, which expectations from investors that leaders will be able to stop the debt crisis with a strong plan to tackle the contagion of the crisis to another economies within the zone, with Italy and Spain the main victims.
Expectations for gold over short-term basis are highly-uncertain, due to the several possibilities in the market regarding the plan from European leaders, where a strong plan to contain the crisis could support the slight optimism and the return of confidence and normal markets, while inconvenience may lead another selloff wave to spread in markets with heavily loss could be seen across the board, as the dollar could gain the most, reflecting negative effect on the metals and other currencies.
As we mentioned before, the slight optimism in the market supported precious metals to trade higher, while the U.S. dollar is loosing momentum, where the effect could also be tracked on silver, which started the session at $32.12 per ounce, and recorded a high of $32.44 and a low of $31.88, and is trading now around $32.39 per ounce.
Among other precious metals, platinum opened the session at $1554.93 per ounce, and recorded a high of $1558.43 and a low of $1543.88, and is trading now around $1554.57 per ounce, yet could gain as optimism could support demand for metals today.