Gold to gain momentum on European optimism
As this week comes to an end today, metals rebound slightly to the upside in attempts to recover some of the losses incurred during the week, where metals declined after renewed fears and jitters hit pressured them to the downside on global slowdown concerns, which supported the U.S. dollar to gain momentum and forced downside pressures on commodities in general to trade lower.
Yesterday, gold fluctuated heavily as expected yet ended the session with losses after the European manufacturing and services sectors contracted unexpectedly in March, signaling that Europe isn't on the right track of recovery, the thing that regenerated fears and tension in the market and sent the European common currency to the downside.
Gold was a little changed today adding so far 0.01% or $0.18 per ounce after the opening of $1645.90 per ounce. The metal set the highest at 1649.00 and the lowest at $1642.05 per ounce.
However, during the session today gold is expected to incline and correct most of the losses incurred this week, as optimism dominated the market with the start of the European session after the Italian lower house of parliament provided markets with a final approval to the liberalization bill, a bill that consists of a package of reforms that is expected to spur growth in Italy and improve competitiveness.
Moreover, the European Central Bank President, Mario Draghi, provided encouraging comments regarding the Greek situation, where Draghi told German newspaper Bild-Zeitung that Greece is able to overcome the current financial downturn; however, the nation must implement the required reforms and cut the deficit.
Yesterday, a draft issued by the European Union's Executive arm included details over combining the current temporal European Financial Stability Facility (EFSF) with the Permanent European Stability Mechanism (ESM) in attempts to expand the European firepower to $940 billion, creating a firewall against the two-year debt crisis.
Volatility and fluctuations are highly possible especially with lack of critical fundamentals from major economies and as this week comes to an end, where some investors may close their position and accordingly the effect will be revised and markets might end up with slight gains today.
Silver, on the other hand, shed 0.28% or $0.09 per ounce, trading now around $31.49 per ounce after the opening of $31.58 per ounce. The metal reached a high of $31.71 and a low of $31.44 per ounce.
Platinum added 0.10% or $1.63 per ounce after the opening $1621.37 per ounce, to currently hover around $1623.00. The metal set the highest at $1634.25 and the lowest at $1615.50 per ounce.
Palladium also advanced 0.50% of $3.25 per ounce to hover in the moment around $658.25 per ounce. The metal recorded the highest at $661.50 and the lowest at $652.00, noting that the metal started the session at $655.00 an ounce.