Gold to gain ahead of the U.S. jobs report
As we expected yesterday, the shiny metal gained more positive momentum and extended the gains recorded over weekly basis despite the strength of the U.S. dollar, where investors' demand for gold surged during the past session as a hedge against uncertainty, where this week all eyes are looking forward to the closely watched U.S. jobs report and after the downbeat French bond auction, markets wait for the reaction of rating agencies with the French credit rating in the danger zone.
Yesterday, France was able to sell around 8 billion euros of long-term bonds, meeting the targeted sale that was in a range between 7 and 8 billion euros; however, demand for the benchmark 10-year bonds was weak, while yields surged to high levels compared with the safe haven German bunds, which weighed negatively on the common currency and spread pessimism in the market.
The U.S. dollar benefited the most yesterday, where the index reached 81.00 point, the highest level recorded since January 2011; however, gold was able to hold onto the gains recorded earlier as investors kept on holding the metal ahead of the critical jobs report from the world's largest economy today.
Gold lost 0.22% or $3.60 per ounce after the opening of $1622.73 per ounce, to currently trade around $1619.13 per ounce. The metal recorded a high of $1628.52 and a low of $1616.97 per ounce.
Today, heavy fundamentals are to be released from Europe and the U.S, where the metal is expected to gain ahead of the heavy load of macroeconomic fundamentals awaited today as investors could flee to the metal in order to protect their wealth; however, gold is expected to fluctuate heavily and to be very volatile as the first week of 2012 has come to an end.
The euro-area region will release confidence data today, with expectations the European confidence could have dropped further in December after the huge losses seen across the board and as European leaders still didn't provide markets with a detailed plan that shows how the zone plans to tackle the debt crisis and shield larger economies from following Greece, Ireland and Portugal into deep crisis.
In addition, the euro zone will provide markets with the retail sales indexes for November, with expectations retail sales could have dropped in the month amid rising fears and fragile confidence. Volatility is to remain evident ahead of the unemployment rate from Europe, which could have lingered at 10.3%.
The world's largest economy will release today the jobs report, where the public sector is expected to add 155 thousands new jobs more than the previous addition of 120 thousand jobs; however, unemployment is expected to climbed to 8.7% from 8.6%.
Among other previous metals, we can see silver also shed 0.36% of $0.11 per ounce to currently trading around $29.25 per ounce, after the opening of $29.36 per ounce. The metal recorded the highest at $29.41 and the lowest at $29.14 per ounce.
Platinum on the other hand gained 0.09% of $1.25 per ounce to currently trading around $1416.50 per ounce, compared with the opening level of $1415.25. The metal set the highest level at $1420.50 and the lowest at $1407.00 per ounce.
Palladium moved to the downside after the opening of $638.00 per ounce, where the metal lost $1.00 per ounce or 0.16% to trade in the moment around $637.00 per ounce. The metal set a high of $642.25 and a low of $635.50 per ounce.
We repeat that metals and markets in general are expected very volatile today ahead of the heavy load of fundamentals awaited and also as this week comes to an end, where investors tend to close their position ahead of the coming weak in order to protect their wealth against any sudden decisions that could take place during the weekend.