Markets trade narrowly with the start of this week
With the beginning of a new week, markets are trading narrowly; as we can see metals, commodities and currencies are barely moving, awaiting fundamentals from major economies to reveal the performance of the services sectors across the globe, with eyes are still focused on Europe, as Merkel and Sarkozy are to meet today, while the Italian Premier was able to pass the new austerity package through the cabinet yesterday, and now markets are waiting for the approval of the Italian upper and lower houses.
Gold ended a bullish week, supported by eased jitters and debt concerns in Europe and U.S, where after the Central Banks intervention spread optimism on Wednesday, Germany supported the relief rally when approved boosting the International Monetary Fund role in fighting the crisis.
In addition, the United Kingdom also added positivity to the market last week after showing commitment to any changes in the European Union treaty. The United States also supported markets to end a bullish week after the upbeat jobs report, which showed that unemployment dropped to 8.6% from 9.0%.
Gold opened last week at $1683.79 per ounce, and recorded the highest at $1762.90 and the lowest at $1680.95, and closed the session in New York on Friday at $1744.52 per ounce.
Today, gold is trading within narrow levels, awaiting critical fundamentals from Europe and U.S, where eyes are focused on the services sectors performance worldwide in addition to the retail sales in Europe, which is expected to show some improvement in the spending levels.
The shiny metal opened the session in Asia today at $1746.63 per ounce, and reached a high of $1754.60 and a low of $1743.15, and is currently trading around $1745.35 per ounce.
The Italian Prime Minister passed the new package of austerity and growth worth 30 billion euros through the cabinet yesterday, in attempts to spur growth in Italy and save the one currency union. The new austerity package includes cuts to the costs of maintaining the Italian political class, measures to prevent tax evasion, measures to spur growth and competition, imposing new taxes on private wealth and finally limiting cash transactions to payments under 1000 euro. Mario Monti, will outline the new measures to the upper and lower houses of parliament today.
The German Chancellor, Angela Merkel and the French President Nicolas Sarkozy will meet today to discuss their views for a closer fiscal integration between European Union's nations ahead of the European Summit this week, where better integration should support European nations to stop the expansion of the debt crisis, which currently threatens the union the most.
Finally, markets are expected to fluctuate heavily today ahead of the ECB rate decision and the European summit this week, but in general we expect markets to remain volatile; however, over weekly basis metals are expected to end this week higher as optimism is expected to dominate while the European Central Bank is expected to cut rates to spur growth in the time European leaders are expected to finally implement measures and resolve the debt crisis once and for all.
Silver opened the session in Asia today at $32.49 per ounce, and recorded a high of $33.04 and a low of $32.49, and is trading now around $32.75 per ounce, extending the gains recorded in the past week.