Gold fluctuates ahead of the FOMC rate decision, negatively biased

With the start of this week gold declined sharply as pessimism spread in the market after the European summit on Friday failed to quell jitters and provide a comprehensive plan to tackle the two-year old debt crisis, yet markets rebounded slightly today as optimism spread in the market ahead of the FOMC rate decision and the retail sales index from the world's largest economy, which started to recover in a faster pace than other major economies.

Gold opened the session in Asia today at $1665.90 per ounce, and recorded the highest at $1667.99 and the lowest at $1650.49 and is currently hovering around the level of $1660.00 per ounce.

The U.S. dollar fluctuated heavily after starting the session in Asia today, where the index is affected by the mixed sentiment in the market, where fears and debt concerns in the market supported investors to hold the U.S. dollar in order to avert as much risk as possible, but on the other hand, the slight wave of optimism seen weakened the U.S. dollar and in result reflected cautious trading across the board.

However, the sentiment is mixed in the market, where despite the positive bias seen in the market, the escalating debt crisis in Europe and the failure from leaders to create a firewall to protect other nations from the debt crisis contagion could cost the euro-area region its credit rating, which renewed fears and debt concerns and reflected some demand for safe havens.

Markets are waiting for rating agencies to act after the European summit, where Standard & Poor's threatened the euro area region before the summit with a possible downgrade, yet the agency still didn't comment on the summit, while the decision is expect anytime this week.

On the other hand, Moody's Investors Service explained on Monday that the agency intends to review the rating of the entire European Union in the first quarter of the next year, where the agency clarified that European leaders provide few new measures to tackle the two-year debt crisis.

Fitch Ratings agency also provided negative comments regarding the European summit, where the agency said despite the new treaty reached for a deeper economic integration, European leaders failed to provide a comprehensive solution to solve the debt crisis, which in result added more pressures on the euro-area region credit rating.

Among other previous metals, silver also fluctuated heavily after opening the session at $31.27 per ounce, and recorded a high of $31.29 and a low of $30.88, and trades now around $31.18 per ounce.

Platinum on the other hand gained $3.25 per ounce or 0.22% after opening the session at $1487.00 per ounce, recording the highest at $1494.75 and the lowest at $1483.25, and is trading now around $1490.25 per ounce

Markets are expected to remain volatile ahead of the FOMC rate decision expected later in the day, with expectations the Fed could have left rates unchanged near its zero range in order to support growth further especially when unemployment fell to 8.6% and personal spending improved, while the economy started to recover in a faster pace.