Gold advances slightly as some relief is seen in the market
As this week comes to an end, gold recovers some of the huge losses incurred during the week, where pessimism dominated the market and fears renewed as yields on European bonds surged, leading investors to demand the low yielding U.S. dollar in order to avert as much risk as possible; but on the other hand, closed their positions on gold to cover the losses seen across the board.
The U.S. dollar opened the session this week at 76.66, and recorded a high of 78.46 and a low of 76.66, and is currently hovering around 78.12, extending the gains recorded in the past two weeks.
Today, gold could extend the gains as European nations are taking serious steps to quell jitters and tackle the debt crisis; however, eyes will be focused on the Italian parliament to approve the austerity measures so Monti could start implementing the measures needed to save his nation, easing the pressures forced on the metal, as demand for the low yielding currency should weaken.
Gold started the day at $1721.42 per ounce, and recorded the highest at $1728.44 and the lowest at $1710.95, and is currently hovering around $1727.25 per ounce. Over weekly basis, gold is heading for the biggest weekly losses in seven weeks, where the metal opened the session this week at $1788.14 per ounce and recorded the highest at $1795.78 per ounce and the lowest at $1710.46 per ounce.
Europe remains the main focus in the market, where investors are tracking developments very closely in Italy and Greece; however, fears are mounting now after rising yields on indebted-nations bonds in Europe added to concerns that soon euro-area nations will become unable to obtain funds and access the capital market, and even though they were able to do so, unsustainable yields will force more pressures on nations, where the debt crisis after pressuring the pace of growth and recovery is spreading now in terms of rising yields.
Yesterday, the Italian Prime Minister, Mario Monti won a vote of confidence in the Upper House of Senates with a total of 281 votes in favor of the budget plan, while 25 votes were against it, and now all eyes are focused on the Lower house of Deputies to grant the budget plan, giving the New Premier the green light to start implementing the measures needed to support Italy to get back on track and reduce its huge load of debt which reach 120% of the GDP and amount 1.9 trillion euros.
Greece on the other hand, is a step forward and ended the political instability and passed the austerity measures through the parliament and now all eyes are focused on the new Premier and his efforts to obtain the next tranche of last year's bailout, where Greece is set to go through a bankruptcy next month without any financial aid.
Silver started the session in Asia at $31.65 per ounce, and set the highest at $31.92 and the lowest at $30.91, and is trading in the moment at $31.75 per ounce.