Gold to recover some of the losses, ahead of the Italian bond auction
With the start of the session today, gold recovered some of the huge losses incurred during the session yesterday, where the rising uncertainty in the market led investor to hold more gold ahead of the critical Italian and German bond sales and also ahead of the United Kingdom's jobs report for November.
Gold opened the session today at $1631.10 per ounce and recorded the highest at $1641.38 and the lowest at $1622.87, and is trading in the moment around $1635.51 per ounce, and is expected to remain volatile ahead of the awaited bond auctions.
Yesterday, the shiny metal declined sharply as expected, where the strengthening U.S. dollar and the losses seen across the board gave the metal more reasons to extend the decline, where investors tend to liquidate their gold positions in order to cover the losses seen across the board. The U.S. dollar gained after Feds left rates unchanged and didn't announce any monetary easing this meeting.
The U.S. dollar index (USDIX) inclined sharply yesterday, reaching the highest level recorded in eleven months at 80.38. The dollar trades now around 80.37, after recording a high of 80.40.
In addition, inflation in the United Kingdom slipped to 4.8% from the previous 5.0% in November despite the monetary easing, which eased demand for gold as a hedge against inflation and uncertainty, where now we expect the Bank of England to provide further monetary easing in order to support growth further, especially after U.K. decided to act individually after European leaders split over the new intergovernmental treaty and U.K's financial industry.
The Italian bond auction today will be our main focus, especially after the successful bond sales by Spain and the European Financial Stability Facility (EFSF) yesterday, where both auctions saw lower yields and stronger demand. Italy will auction 3.0 billion euros of 5-year bonds, while Germany will sell as much as 5 billion euros of 2-year bonds.
The United Kingdom will provide markets today with the jobs report for November, with expectations the claimant count rate, which measures the number of terminated employees who are seeking jobless benefits, could have climbed to 5.1% from 5.0%, while jobless claims are expected to contain an additional 13.7 thousands new claim, yet the ILO unemployment rate for the three months ended in October could have remained unchanged at 8.3%.
In general, volatility is expect to remain evident ahead of the coming year, where eyes will remain concentrated on Europe and the developments in the euro-area region, tracking the efforts made to tackle the debt crisis and how and when leaders will implement the decisions and plans made in the last European summit.
Among other precious metals, silver opened the session today at $30.72 per ounce, and recorded the highest at $31.00 and the lowest at $30.57, and is currently hovering around $30.83 per ounce, recovering some of the huge losses incurred with the start of this week.
Platinum inclined 0.27% or $4.00 after the opening of $1474.00 per ounce, to currently trade around $1478.00 after setting the highest at $1481.38 and the lowest at $1466.00 per ounce.
Palladium on the other hand lost 0.62% of $4.00 after opening the session at $644.75 per ounce, to currently trade around $640.75, after recorded a high of $647.88 and a low of $639.25 per ounce.