Gold fluctuates heavily ahead of the European summit tomorrow
Gold fluctuated heavily after the opening in Asia today, to currently trade around the opening level; however the metal is biased to the upside ahead of the European leaders' summit tomorrow, where all eyes are focused on the results of the summit tomorrow with lack of major fundamentals today, awaiting the mechanism of solving the debt crisis in Europe.
Gold opened in Asia today at $1653.42 per ounce, recording the highest at $1659.40 and the lowest at $1643.31, and is trading now near the opening level around $1654.12 per ounce.
Yesterday, gold was able to recover some of the losses incurred during the past week, where the metal closed in New York at $1653.27 per ounce, noting that gold opened at $1641.00 and recorded a high of $1661.68 per ounce.
Investors tend to hold more of the shiny metal as a hedge against uncertainty ahead of the European leaders summit, where despite the optimism seen yesterday, gold was able to close the session with gains supported by the weak dollar, which eased some of the downside pressures forced on commodities and metals.
Volatility and heavy fluctuations are possible today, with lack of critical fundamentals from major economies, yet Europe remains center stage with all eyes focused on European leaders and the steps to be taken to tackle the debt crisis once and for all.
Markets are looking forward towards the summit tomorrow, with optimistic outlook that leaders have finally found common grounds and will be able to draw a roadmap to overcome the two-year debt crisis.
We expect markets to remain highly volatile ahead of the summit tomorrow, where the summit could have a deep impact on markets and investors, as a disappointment to markets could spread huge losses across the board and could eliminate the slight confidence that European leaders are able to overcome the crisis, while pessimism will dominate again, supporting the debt crisis to worsen and deepen further and to spread into Italy, Spain and finally approaching France.
Gold, which gained the most on the debt crisis, has lost demand over the past period after global exchange markets raised margin requirements on gold futures twice, which affected the attractiveness of the metal. Gold also moves against the U.S. dollar after these movements affected the appeal of gold as a safe haven.
Among other precious metals, silver is also fluctuating heavily within narrow levels after the opening at $31.70 per ounce, where the metal reached a high of $31.84 and a low of $31.50 and is currently hovering around $31.60 per ounce.
Moreover, platinum, which became cheaper than gold, also traded within narrow levels today, where after the opening at $1546.00 per ounce, the metal recorded a high of $1564.50 and a low of $1540.75 per ounce, and is currently trading around $1544.75 per ounce.