Gold advances as hedge against uncertainty
Gold continues to gain as a hedge against uncertainty as markets are still volatile and instable ahead of the meeting between the Greek Prime Minister and the leaders of the political parties in Greece over obtaining the second bailout package, where the meeting was delayed for the second time as Greek officials and creditors are still negotiating a debt-swap deal. However, the final terms required for Greece to obtain the second bailout package are being finalized and expected to be announced today.
Gold started the session today at $1745.48 per ounce and added so far 0.17% or $3.22 per ounce to $1748.70 per ounce. The metal set the highest at $1751.96 per ounce and the lowest at $1742.43 per ounce.
The Greek Prime Minister, Lucas Papademos, is set to negotiate the terms of securing the second bailout package with political leaders today in Athens, where the Greek government attempts to arrange finances to avert default as the country could face bankruptcy as soon as March 20, when the country is set to return 14.5 billion euros of maturing bonds.
Moreover, markets are still waiting the final agreement between the Greek government and the private sector over the percentage haircuts and the coupon rate, which is the interest rate to be paid on the new 30-year bonds to be issued in exchange for the current Greek debt.
Yesterday, the metal gained sharply as expected affected by the rising uncertainty in the market in addition to the weakening dollar which reached the lowest level recorded in two months, easing the downside pressures forced on the metals in general and also on the other commodities and currencies to trade higher.
The sentiment in the market is mixed now, especially with the mixed fundamentals from Europe, where Switzerland unemployment climbed less than expected to 3.4% from 3.3%, while the seasonally adjusted unemployment lingered at 3.1%. In addition, German trade surplus narrow beyond expectations to 12.9 billion euros from 15.9 billion, affected by the drop in exports that shed beyond expectations by 4.3% from the 2.6% expansion.
Furthermore, eyes will be focused on the German and Switzerland bond auctions today, where markets will track any changes in the yields and demand for those bonds, especially after the mixed fundamentals from both nations today.
Among other precious metals, silver advanced 0.32% or $0.11 per ounce to $34.25 per ounce after the opening of $34.14 per ounce. The metal reached so far the highest at $34.29 and the lowest at $34.06 per ounce.
Platinum also advanced 0.23% or $3.75 per ounce after the opening of $1651.25 per ounce to currently hover around $1655.00 per ounce. The metal recorded so far a high of $1657.11 and a low of $1642.75 per ounce.
Palladium also surged recording a high of $712.64 per ounce after the opening of $710.00 per ounce; however, the metal also reached a low of $706.00 per ounce and is currently trading around $711.50 per ounce after adding $1.50 an ounce of 0.21%.