Gold gains momentum ahead of major fundamental from Europe
With the start of the session today, gold returns to continue the upside move after the decline seen yesterday; however, as we expected the metal recovered most of the huge losses yesterday after the U.S. dollar lost momentum and now we can see the metal extended the gains ahead of the critical fundamentals awaited from the euro-area region.
Gold surged 0.59% or $10.28 per ounce to $1740.35 per ounce after opening the session at $1730.07 an ounce, recording the highest so far at $1741.07 and the lowest at $1728.43 per ounce.
Yesterday, the metal declined sharply; however, after European leaders agreed on the fiscal integration rules and the European Stability Mechanism (ESM) the euro gained momentum against the U.S. dollar, which surrendered some of the gains recorded, easing the pressures forced on the metals to recover some of the losses incurred.
Today, we see that the dollar declined and markets rebounded so far on the European summit results; however, gold gained more momentum as the metal is held more by investors as a hedge against uncertainty ahead of the major fundamentals from the euro zone.
The euro-area region returned to be the main focus and now eyes are concentrated on the unemployment report from Germany and the euro zone, especially when the number of jobless people is expected to climb again in the month of December to 10.4% from 10.4% in the euro-area region.
Markets are also tracking any developments in the Greek debt-talks with the private sector, where both parties are expected to reach to an agreement as soon as the end of this week; however, the importance of the deal comes from the Greek need for the second bailout package worth 130 billion euros before March, when the nation should return 14.5 billion euros of maturing bonds.
Moreover, the world's largest economy will release the consumer confidence figure for the month of January with expectations the confidence could have improved in the month to 68.0 from 64.5, which if confirm optimism could spread in the market that the largest economy in the world succeeded to regain and restore confidence as the economy is leading the recovery and is on the right track to fight the global slowdown and the effects of the debt crisis in Europe.
Silver also advanced today after the opening of $33.50 per ounce, adding 0.79% of $0.27 per ounce to currently trade around $33.77 an ounce. The metal reached so far a high of $33.82 and a low of $33.47 an ounce.
Platinum added 0.70% or $11.25 per ounce after starting the day at $1612.75 per ounce, recording the highest at $1626.50 and the lowest at $1608.25, and is currently trading around $1624.00 per ounce.
Palladium gained 0.65% or $4.50 an ounce to trade in the moment around $693.00 per ounce after recording the highest at $693.25 and the lowest at $687.25, noting that the metal opened the session at $688.50 per ounce.