Metals to recover some of losses ahead of the coming week
As the week comes to an end, gold is currently recovering some of the huge losses incurred during this week and is expected to close the session today with gains, where we expect correctional movements today as investors will tend to close their short positions on gold ahead of the coming week.
Gold opened the session today at $1570.00 per ounce and recorded the highest at $1595.52 and the lowest at $1568.90 and is currently hovering around $1590.00.
Technically, gold is biased to the downside, and the current incline seen is only a correction, where gold is expected to extend the downside movement towards the critical support level of $1540.00 per ounce, yet a breach of the level of 1635.00 positively could negate the downside movement and trigger an intraday reversal.
Gold declined sharply this week, due to the liquidation on the metal, where the escalating debt crisis and fears existed in the market forced investors to seek the low yielding U.S. dollar in order to avert as much risk as possible, which in turn reflected negative demand for commodities, metals and other currencies as we saw huge losses across the board and eventually traders had to close their positions on gold in order to cover the widely spread losses.
Today, our eyes will be focused on the Italian Lower House of Deputies, which is to vote on the austerity package set by the technocratic new government, where Mario Monti, the new Italian Prime Minster provided an austerity plan worth 30 billion euros of cuts in order to bring down the current debt to GDP ratio of 120%, noting that Italy handles more that 2.2 trillion euros of debt.
Italy attempts to restore confidence and ease market tension by providing markets with more measures which reflects the nation's commitment to the procedures needed to avert falling into deep crisis and following Greece, Ireland and Portugal in seeking bailouts, where Italy is too big to bailout and it is the third largest economy in the euro-area region.
The vote is expected to pass easily through the Deputies and the Senators, where the new government is backed by the majority, yet the main focus will be on the Italian yields which kept on rising in the past period reaching to records, where investors are weighing the risks behind Italy falling behind the rest of the euro zone and are expecting Italy to be the next victim of the debt crisis, especially when tension eased in Spain which ran two successful auctions this week.
Yesterday, the U.S. jobless claims unexpectedly fell to 366 thousands from 385 thousands, the lowest in three and a half years, which spread some hopes in the market that the United States returned on the right track of recovery, yet the fears remain evident as the euro-area region could fall into deep recession instead of mild recession and the effect could be huge on the global economy.
Among other precious metals, silver also incline today after the huge losses seen through the week, where silver extends now the slight gains recorded in the past session, where after the opening of $29.08 per ounce, the metal inclined to set a high of $29.77 after reaching a low of $29.07, while it trades now around $29.52 per ounce.
Platinum surged $15.50 per ounce or 1.10% after the opening of $1407.50 per ounce, to currently trading around $1423.00, after reaching a high of $1428.63 and a low of $1400.50 per ounce.
Palladium gained 1.05% or $6.50 after the opening of $619.25 per ounce, to currently hover around $625.75, after setting the highest at $629.75 and the lowest at $617.50 per ounce.
Copper futures for December settlement also gained $6.85 today after opening the session at $328.75 per ounce, to currently trade around the highest level of $332.80, noting that the metal reached a low of $328.75 per ounce.