Volatility dominates precious metals on mixed sentiment and uncertain outlook
Volatility and heavy fluctuations continue to dominate precious metals, where we can see gold and silver are trading tightly for the second consecutive day as the sentiment is still mixed and markets are still wondering what is next for Europe and for the global economy.
Yesterday, gold fluctuated heavily during the European and U.S. session, affected by the downbeat unexpected widening deficit in the United Kingdom. However, volatility reached the peak after the British Chancellor of Exchequer, George Osborne, presented his annual budget statement to the Parliament.
Currencies were also significantly volatile during the session yesterday, the thing that added more volatility to the dollar-denominated commodities, including metals, where the U.S. dollar started the started the session yesterday at 79.62 and reached a high of 79.82 and a low of 79.30 and closed the session at 79.60.
The volatility seen on the U.S. dollar index (USDIX) reflects the sharp movements of other major currencies, including the European common currency, the royal currency and Japanese Yen.
Gold shed so far 0.33% or $5.33 per ounce, currently trading around $1645.10. The metal opened the session at $1650.43 per ounce, recording the highest at $1657.05 and the lowest at $1643.75 per ounce.
The HSBC Flash Manufacturing PMI for China showed that the Chinese manufacturing sector contracted in March to 48.1 from 49.7, the thing that added negativity to the market; however, with the start of the European session hopes mixed with fears ahead of the critical PMI manufacturing and services data from the euro zone.
Median estimates indicate that the German manufacturing sector could have expanded in March to 51.0 from 50.2, while the services sector could have grown to 53.1 from 52.8. For the euro zone in general, the performance of the manufacturing sector could have improved to 49.5 from 49.0, while the services sector probably advanced to 49.2 from 48.8.
The focus after then will be on the United Kingdom, which will release the retail sales index for February, with expectations retail sales could have dropped by 0.5% last month. The yellow metal will probably move in line with the sentiment after the news with expectations better-than-expected figures might support commodities in general to incline on better growth outlook and indirectly gold will rebound recovering the losses recorded so far this week.
Among other precious metals, silver shed so far 0.56% or $0.18 per ounce to $31.98 per ounce, after recording a high of $32.36 and a low of $31.96, noting that the metal started the session today at $32.15 per ounce.
Platinum retreated sharply after the Chinese downbeat news, which forced downside pressures on platinum which is largely used for industrial purposes. The metal cut 0.98% or $16.00 per ounce to $1623.50, trading again below the shiny metal. Platinum opened the session at $1639.50 and recorded a high of $1645.00 and a low of $1623.00 an ounce.