Precious Metals are mixed on European Fears and Strong U.S. dollar
With the start of another week we notice that precious metals are mixed and trading narrowly within a tight range, pressured by the strengthening U.S. dollar and renewed fears over debt contagion and the fall of larger economies in the euro zone, with the main focus remaining on Spain, the fourth largest economy in the euro zone.
With the start of the European session today, the yellow metal surrendered all the gains recorded during the Asian session as European investors are concerned over Spain and the possible fall of this large economy which in result might trigger the fall of Italy and according the collapse of the entire European Union.
Gold was a little changed, adding 0.03% or $0.30 per ounce to $1662.20 per ounce after recording the highest at $1669.57 and the lowest at $1660.57 per ounce. The metal started the session at $1661.90 per ounce.
The Strengthening U.S. dollar forced downside pressures on commodities and specifically on precious metals to trade lower today, where investors fled to the low yielding U.S. dollar in order to avert as much risk as possible and at the same time liquidated their gold positions to cover the losses incurred across the board.
Over weekly basis the yellow metal is expected to regain momentum and rebound to the upside ahead of the European summit on March 30 and 31, where finance ministers are set to meet and discuss expanding the capacity of the European rescue fund, which might combine both the temporal European Financial Stability Facility (EFSF) and the permanent (ESM) European Stability Mechanism together.
Concerns renewed during the weekend after the Italian Prime Minister, Mario Monti, expressed concerns over the Spanish total debt (public finances), where the Premier clarified that Spain might support the debt crisis to intensify and spread widely again as the nation is unable to control the widening budget and deficit.
Spain last month shocked markets after missing the budget targets set for 2011; however, pessimism spread further after the nation set softer goals for the fiscal year of 2012. Markets are concerned and doubt the ability of Spain to avoid the debt crisis as the nation handles the highest unemployment rate in the euro zone, which reached above 20%.
Among other precious metals, silver also gained 0.09% or $0.03 per ounce to $32.25 per ounce, compared with the opening level of $32.22 per ounce. The metal reached so far a high of $32.44 and a low of $32.13 per ounce.
Platinum also added 0.45% of $7.25 per ounce after the opening of $1626.50 an ounce to hover in the moment around $1633.75 per ounce. The metal recorded the highest at $1640.38 per ounce and the lowest at $1624.00.
Palladium added so far 0.41% or $2.69 per ounce to $662.19 per ounce, recording the highest at $664.00 and the lowest at $657.50 per ounce.