Gold gains strength ahead of the Italian vote
Gold gained strength today ahead of the Italian vote, where despite expectations that the vote will pass easily through the Italian upper house today, investors are still worried that Italy in spite of the serious steps taken could still face challenges and difficulties especially when the political platform is still unclear, supporting demand for the shiny metal as a hedge against uncertainty, and especially when the U.S. dollar is weakening and optimism is seen in the market.
Gold opened in the Asian session today at $1757.70 per ounce and recorded the highest at $1769.91 and the lowest at $1744.70, and is hovering in the moment around $1766.30 per ounce.
As this week comes to an end, we see some improvement in Europe, while the sentiment is better and Italian steps could support markets to restore confidence; however, gold gained strength today ahead of the Italian vote, where this critical vote could affect the euro zone as whole, as Italy is considered too big too bailout and providing strong protection for Italy could save the one currency union.
Moreover, optimism is dominating the market today as European government started to take the debt crisis seriously and provided several attempts to contain the debt crisis and end it once and for all, where Greece named the new government yesterday as Lucas Papademos, the former European Central Bank Vice President, became the new Premier and now his objective is clear, which is leading the country towards the financial aid that is needed as soon as possible for Greece in order to avert an early default.
Despite the gains seen, gold lost big time this week as European lawmakers were able to take a step forward towards solving the debt crisis, where the European Central Bank cuts rate to support growth and revive recovery, while the European Union demand Italy to quicken the implementation of the austerity measures and now all eyes remain focused on Europe awaiting the implementation of the final plan approved on the October 26 Summit.
Today, gold could reverse to the downside after the approval from the Italian senators on the austerity measures; however, volatility and heavy fluctuations are highly possible as this week comes to an end and investors could tend to close their positions on metals ahead of the coming week, especially when another vote on the austerity measures is expected from Italy during the weekend.
Among other precious metals, silver is fluctuating heavily within narrow levels for the second consecutive day, where after the opening of $34.00 per ounce, the metal recorded a high of $34.14 and a low of $33.70, and is trading in the moment at $33.95 per ounce around the opening level.
Platinum on the other hand gained some slight strength today, where after starting the session at $1621.25 per ounce, the metal set the highest at $1637.75 and the lowest at $1612.0, and trades now around $1624.75 per ounce.