Gold fluctuates heavily, likely to rebound on better European confidence
With the start of a new session, precious metals return to move violently within a tight range, affected by the mixed sentiment and fears that are dominating the market ahead of the European confidence figures and also before finance ministers start their monthly meeting in Denmark tomorrow.
Gold declined so far 0.08% or $1.13 per ounce to $1662.54 an ounce, compared with the opening of $1663.67 per ounce. The metal set the highest at $1665.03 and the lowest at $1656.68 an ounce.
Gold might rebound to the upside today in case European confidence continued to improve in March, where eyes will be tracking further signs of stabilization and any improvement in the sentiment that might support markets to normalize and the confidence to return, the thing that will be reflected in better spending levels and better growth outlook.
Moreover, eyes will also be concentrated on growth data from the world's largest economy, where the third reading of the gross domestic product is projected to confirm that the United States expanded in the fourth quarter of last year by 3.0%, noting that any sudden revision to this figure might have a deep impact on the market, especially after the disappointing comments from the Fed's Chairman, Ben Bernanke, who clarified that U.S. economy might need further easing to continue the upside momentum.
In Europe, eyes are focused on Spain, which is to present the first budget tomorrow, with expectations the Spanish government will adopt more austerity measures to overcome the huge amount of deficit, yet the question to be asked here is whether Spain will be able to balance between boosting growth and creating jobs and at the same time providing more austerity to balance the budget.
Spain is currently spreading fears across Europe, where markets are concerned that Spain might be the next victim of the debt crisis and in result larger economies are falling behind, that thing that might threaten the entire European Union and the common currency, the euro.
Among other precious metals, silver slumped as well, cutting so far 0.03% or $0.02 per ounce, trading now around $32.04 per ounce. The metal set after the opening of $32.06 a high of $32.19 and a low of $31.90 per ounce.
Platinum however added 0.35% or $5.75 per ounce to currently hover around $1641.75 per ounce, after recording a high of $1645.13 and a low of $1631.00, noting that the metal started the session today at $1636.00 an ounce.
Palladium also gained today adding 0.27% or $1.75 per ounce after starting the session at $647.75 per ounce, to currently hover around $649.50 per ounce. The metal reached a high of $650.00 and a low of $642.95 per ounce.