Gold declines at the end of this week, possible rebound
As this week comes to an end, Europe remains the main focus in the market with the economic conditions remain highly uncertain in addition to the political conflict seen in Greece, while all eyes are focused on the G20 summit for more results, especially after the European Central Bank had to cut key rates due to the rising concerns of a Greek default, with the critical jobs report from the world's largest economy later on the day.
Gold opened the session in Asia today at $1763.75 per ounce and recorded the highest at $1764.25 and the lowest at $1754.08, and is currently hovering around $1756.24 per ounce. Over weekly basis, metal opened this week at $1741.85 per ounce and fluctuated heavily recording the highest at $1767.27 per ounce and the lowest at $1681.13 and is expected to rebound to the upside today.
Gold is pressured to the downside ahead of the critical fundamentals and comments from leaders and policy makers, where investors attempts to avert as much risk as possible due to the high level of uncertainty in Europe, where all investors wonder if leaders will provide markets with positivity and agree on measures to be taken quickly to rescue Europe as the one currency union is at risk.
As we can see the U.S. dollar and the Japanese yen are demanded excessively as this week comes to an end, especially when investors attempts to avert risky investments and positions ahead of the coming week, where as usual the session could be very volatile while heavy fluctuations are highly possible especially when eyes will shift to the New York session awaiting the crucial jobs report and unemployment figures from the U.S.
However, our expectations for the day depend on the awaited heavy fundamentals in addition to any comments from world leaders and European officials, where we suggest two scenarios for our session today.
The first one is positive, and could support the shiny metal to recover the losses seen now and gain more over weekly basis, where this scenario suggests that world leaders will reach to an agreement to support the euro area region and Greece will cancel the referendum and commit to the bailout deal, while the jobs report in the U.S. will show that the economy added jobs to the public sector inline or better than expectations, which could reduce demand for the safe haven, major currencies and metals will rebound in addition to the commodities.
However, in case world leaders disappoint investors as European lawmakers done before and provided nothing to the market, while the U.S. jobs report missed the expected addition, markets will turn into deep pessimism and the U.S. dollar could extend the huge weekly gains, forcing more downside pressures on metals and other risky investments to trade lower at the end of this week.
Among other precious metals, silver also declined after it opened the session today at $34.48 per ounce, recording a high of $34.69 and a low of $33.90 and is currently hovering around $34.26 an ounce.