Metals trade narrowly, lights on Europe
Gold is trading within narrow levels today after the heavy fundamentals from Europe yesterday, where gold eased as Italy was able to end the political instability and approved the austerity measures in order to protect the nation from the debt crisis, while European finance chiefs provided nothing critical to markets; however, eyes are still focused on the Greek political reform.
Gold opened the session at $1785.60 per ounce, and fluctuated heavily within narrow levels, recording the highest at $1794.27 and the lowest at $1781.97, and is trading in the moment at $1783.70 per ounce.
Gold is mainly affected by the situation in Europe; where with less uncertainty the metal loses demand and reverses to the downside, while we can see the U.S. dollar benefited from the jittery situation in Europe as investors tend to avert risk and hold more dollars than any other investments.
Europe remains the main focus in the market today, as all eyes are looking forward to Greece, awaiting the Greek parties to agree on a new Prime Minister after Papandreou stepped down and gave his powers to the coalition government.
Euro zone finance ministers found common grounds on Monday and pledged to provide the sixth tranche of last year's bailout package to Greece in case the nation provided written acceptance for the second bailout deal and showed commitment to the austerity measure required to reduce the budget deficit and meet targets set by international lenders.
The Italian Prime Minister, Silvio Berlusconi passed the austerity package through the Parliament yesterday, and agreed to step down which eased market pressures and tension, where several lawmakers and officials in Italy demanded the Premier to resign and leave his position; however, all eyes are focused on Italy now since the country is highly exposed to the contagion of the debt crisis, while political instability could hinder the application of the austerity measures, which are highly needed for the country to reduce the largest amount of debt in the euro-area region.
Moreover, heavy fundamentals from China today affected the metal to trade lower, where the Chinese inflation retreated in October, reflecting less demand for gold as a hedge against inflation, where the consumer price index retreated to 5.5% from 6.1% in line with expectations, while the producers' price index retreated to 5.0% from 6.5% more than expected.
Silver also fluctuated heavily within narrow levels today, after the mixed trading seen yesterday, where the metal started the session in Asia today at $34.96 per ounce, and recorded a high of $35.21 and a low of $34.72, and is currently hovering around $34.85 per ounce.
Among other precious metals, platinum is still trading below the shiny metal around $1661.0 per ounce, where the metal fluctuating heavily between the highest level recorded at $1674.25 and the lowest at $1654.0, noting that platinum started the day at $1660.50 per ounce.