Gold extends the losses on eased inflationary pressures
With the start of the another session this week, the shiny metal is still biased to the downside and could extend the downside movement today, where the metal was affected sharply by the Chinese announcement of cutting growth forecasts for 2012 by 0.5%, easing inflationary pressures as the expansion in China is losing momentum and in result eased demand for gold as a hedge against inflation.
Gold shed so far around 0.31% or $5.23 per ounce to $1701.27 compared with the opening level of $1706.50 per ounce. The metal set so far the highest at $1709.13 and the lowest at $1700.13 per ounce.
Moreover, demand for the shiny metal as a hedge against uncertainty started to ease as economic and financial situation in the euro zone started to become clearer while details are being provided and Greece is approaching a final deal with the entire private sector, which is holding the Greek current debt.
The Institute of International Finance (IIF) said that it would accept an offer to reduce the Greek debt by around 100 billion euros; however, eyes are still focused on the Greek debt held by industry sources, which are estimated to be around quarter of the total debt held by the private sector.
Tension over the Greek debt issue and over an economic collapse expected previously during March started to ease, adding more downside pressures on the metal to trade lower, where less investors are holding the metal now as a safe haven.
The main focus will be today on the gross domestic product figures from the euro-area region, with expectations the region could have contracted by 0.3% in the fourth quarter of 2011, led by the sharp drop in consumption and gross fixed capital levels.
Volatility could dominate markets ahead of the major data from the euro zone; however, better than expected data could add some positivity to the market and support metals and commodities in general to rebound, but worse than expected data could send the metal and the European common currency further to the downside.
Silver cut around 0.60% or $0.20 per ounce so far, trading in the moment around $33.77 per ounce, after recording the highest at $34.19 and the lowest at $33.72, noting that the metal started the session today at $33.97 per ounce.
Among other precious metals, platinum surrendered 0.15% or $2.50 per ounce after the opening of $1663.00 to currently hover around $1660.50 per ounce, the metal reach a high of $1670.25 and a low of $1653.75 per ounce.
Palladium shed 0.25% or $1.75 per ounce to $703.75 per ounce after starting the session at $705.00 per ounce. The metal recorded so far the highest at $708.75 and the lowest at $701.50 per ounce.