Gold to gain momentum as ECB will allot LTRO today
As expected gold inclined sharply yesterday to close the session with gains on a weak U.S. dollar and rising inflationary threats; however, today the metal continues the upside move with expectations to gain more momentum before the European Central Bank allots three-year tenders after taking bids from European banks yesterday.
Gold gained so far 0.22% of $3.82 per ounce to currently trade around $1788.05 per ounce after starting the session at $1784.77 per ounce. The metal set the highest at $1790.57 and the lowest at $1783.65 per ounce.
Volatility and heavy fluctuations are dominating the market now, where we can see currencies, commodities and metals are moving violently within short ranges ahead of the announcement of the long-term refinancing operations and also ahead of the inflation data from the euro-area region and growth figures from the world's largest economy.
After investors held gold positions significantly yesterday, they seems to be demanding more of the shiny metal with the start of the European session today as some investors bet on the metal to continue the upside journey with the announcement of the ECB's second round of easing for banks, which could spread optimism in the market and support the metal to rebound more on a weakening U.S. dollar.
Moreover, some investors hold more of the shiny metal today as a hedge against uncertainty, where due to the importance of the second round of easing for banks tension could be seen in the market and, therefore, some investors may flee to the precious metal in order to protect their wealth against any expected surprises.
Critical fundamentals are to be released from major economies today, where eyes will be focused on the unemployment report from Germany, inflation data from the euro-area region and the gross domestic product figures from the world's largest economy, with expectations inflation will remain above the ECB targets at 2.7%, while growth in the U.S. will be at 2.8% in the fourth quarter of last year.
Among other precious metals, silver advanced as well today, adding so far 0.68% of $0.25 per ounce after the opening of $36.90 per ounce to trade in the moment around $37.15 per ounce. The metal recorded a high of $37.22 and a low of $36.86 per ounce.
Platinum recorded 0.44% or $7.50 of gains per ounce so far, after recording the highest at $1730.00 and the lowest at $1719.00 per ounce, to currently trade around $1726.00 compared with the opening level of $1718.50 per ounce.
Palladium on the other hand was a little changed, cutting 0.10% or $0.75 per ounce to $721.50, after starting the day at $722.25 per ounce. The metal reached so far the highest at $725.25 and the lowest at $720.00 per ounce.