Gold recovers some of the losses as jitters ease in Europe
Gold slightly gained to the upside today after the huge losses seen in the past three sessions, where the U.S. dollar lost some strength with the start of the session today, easing some of the downside pressures forced on commodities and metals to trade higher, where gold suffered in the past sessions from profit taking as investors closed their gold position to cover the huge losses seen across the board.
Gold started the session at $1762.20 per ounce, and traded narrowly between a high of $1766.96 and a low of $1757.81, and is currently trading around $1764.00 per ounce.
However, with eased jitters in the market today, the metal returned to gain some strength; however, volatility and fluctuations are expected today, especially when eyes are focused on France and Spain which are to sell governmental bonds later in the day.
Investors are tracking bonds auction in Europe with eyes concentrated on yields, where the debt crisis is spreading in terms of rising yields due to the renewed fears and debt concerns, which could create a bigger problem for European nations, as they may not be able to access the capital market, and even though they could yields are hiking to high records, leaving them with more debt to handle, which threatens not only the nations themselves, but also the entire European Union.
The Spanish finance minister lowered Spain's growth forecast for the current year to 0.8% from 1.3% predicted in August, raising concerns that European nations in addition to the deepening debt crisis, they could also go into recession in the fourth quarter of this year, unless European leaders were able to restore confidence and support markets by implementing the comprehensive plan approved in the October 26 summit.
Greece took one more step forward, and now the focus in on the implementation of the austerity measures, where yesterday the new Prime Minister, Lucas Papademos was able to win a vote of confidence on the new coalition government, and now his priority is to obtain the sixth tranche of last year bailout package worth 8 billion euros quickly to support the nation's financial system, which is threatened by an early default.
Italy also attempts to act quickly, where in less than three days, Mario Monti the fresh New Italian Primer formed a technocratic government and announced himself the new finance minister, while his task is now quell rising jitters that Italy is the next victim of the debt crisis by forcing the new measures approved by the Italian lower and upper houses.
The United Kingdom will release the retail sales index for October, which could have dropped by 0.2% from the previous 0.6% improvement as the Bank of England explained that growth prospects have worsened, affect by the escalating debt crisis in Europe and the global slowdown.
Among other precious metals, silver also surged a bit after starting the session in Asia at $33.70 an ounce, reaching a high of $33.93 and a low of $33.46, and is trading in the moment at $33.77 per ounce.
Platinum also gained slightly today, where after opening the session at $1621.50 per ounce, the metal reached the highest at $1627.25 and the lowest at $1612.75, and is trading in the moment at $1623.50 per ounce.
We expect markets to be very volatile and gold to fluctuate heavily as market instability is still evident and fears and jitters are still dominant, where investors lost faith in the euro zone and will not be optimistic anymore unless they see serious steps to implement decisions and plans.