Gold is weak ahead of the final results of EU finance chiefs meeting
With the start of the session today, gold was able to gain slightly ahead of the European session, where after Europe joined the trading, gold reversed to the downside as investors are weighing the mixed decisions made by the euro zone finance ministers yesterday, awaiting critical fundamentals from major economies.
Gold is expected to fluctuate heavily today ahead of the EU ministers meeting and the critical fundamentals due today. Gold opened at $1715.47 per ounce and recorded the highest at $1726.45 and the lowest at $1706.09, and is currently hovering around $1710.10 per ounce.
The U.S. dollar returned to gain momentum and force downside pressures on other major currencies and commodities, and in result the downside pressures could be tracked to the metal's movement, as we can see investors tend to liquidate their gold positions in order to cover the losses incurred in other markets.
The euro-zone finance ministers agreed to provide Greece and Ireland with the next tranches of the previous financial aid packages, which in result eased tensions that Greece could face an early default; however, the measures taken disappointed investors who are seeking for a greater role of the European Central Bank in fighting back the crisis.
The Euro-zone finance minister agreed to seek further support from the International Monetary Fund (IMF) instead of the European Central Bank, which is a critical move and should ease jitters and rising debt woes in the market, where the European Central Bank shouldn't intervene directly in fighting the crisis unless the debt crisis threatens the one currency union itself; however, pessimism spread in the market as European lawmakers excluded the European Central Bank intervention for now.
Our eyes will be focused today on the EU finance ministers meeting in Brussels, where markets will track clear decisions and how those decisions will be implemented, especially after euro-zone finance ministers were unable to quell jitters yesterday, and spread further pessimism in the market, despite the several decisions made.
Critical fundamentals are to be released today, where the euro zone and Germany will provide us with the unemployment figures, which are expected to remain unchanged at 7.0% and 10.2% respectively, while the euro zone will add the CPI annual flash estimate for November, with expectations inflation could have lingered at 3.0% in the month; however, worse-than-expected figures could support pessimism to spread more and the sentiment to deteriorate further as the debt crisis is escalating and the effects are traced on the European and the global economy significantly.
The United States will also release the closely watched ADP employment report, with expectations that the report will ease the jittery situation in the market as the U.S. private sector is projected to add 130 thousands new jobs compared with the previous addition of 110 jobs in October.
Silver also slumped after starting the session at $31.90, to currently trade around $31.64 per ounce after setting the highest at $32.18 and the lowest at $31.53 per ounce.
Among other precious metals, platinum also shed 0.90% or $14.00 after opening the session at $1536.50 per ounce, where the metal recorded the highest at $1547.75 and the lowest at $1516.00, and is trading now around $1521.50 per ounce.
Palladium also lost 0.64% or $3.75 per ounce, where after the opening of $587.00 per ounce, the metal reached a high of $590.50 and a low of $578.50, and trades now around $582.00 per ounce.