Gold inclined sharply yesterday after the Federal Reserve announced further easing, where we mentioned in our report yesterday that further easing could send the U.S. dollar south and support the metal's positive momentum. Today, we expect the metal to continue the upside move as investors hold more gold as a hedge against uncertainty ahead of the resumed Greek debt talks and also ahead of the Italian bond sale and the durable goods report from the world's largest economy.
Gold shed as much as 0.25% or $4.20 per ounce after the opening of $1710.58 per ounce to currently trade around $1706.38 per ounce. The metal set so far a high of $1714.72 and a low of $1702.85 per ounce.
Yesterday after the Federal Open Market Committee (FOMC) rate decision the Federal Reserve pledged to keep rates at the virtually zero level in the range of 0.0%-0.25 till late 2014 in order to support the pace of growth to remain strong, which sent the U.S. dollar south, trading in areas around a one-month low.
Moreover, optimism spread further in the market after the Fed adjusted growth, unemployment and inflation forecasts for the coming three years, where despite the lower growth forecasts provided, unemployment is expected to fall sharply during the coming three years, while inflation in expected to advance slightly with positive signs the world's largest economy is to recover from the financial crisis and ease the impact of the escalating debt crisis on the global economy.
Today, eyes will be focused during London session on the Italian bond sale and the resumed Greek debt talks, where markets are still paying attention to the bonds market for signs whether European indebted nations are still accessing the capital market easily or yields will rise again forcing more pressures on the euro-area region to contain the two-year debt crisis.
Greece will continue talks with the private sector today over the losses the private sector are willing to voluntary incur, where talks are to start again after Greek authorities reached to a dead end last week. Currently, Greece and the euro-area finance minister rejected to return 4% coupon rate on the new bonds to be issued in exchange for the existing Greek debt; however, the negotiations will continue today as the private sector didn't accept a 3.5% coupon rate on the bonds.
The shiny metal could be very volatile today with the lack of major fundamentals from Europe; however, with the start of New York session, the concentration will shift to the durable goods report and the weekly jobless benefits statistics, which expectations the critical durable goods excluding transportation could have expanded by 0.9% from 0.3% in December, while jobless benefits could have increased to 370 from 352 thousand order. Noting that better than expected data from U.S. could add more positivity to the market as support the metal to incline as the dollar could weaken.
Silver also declined today, where the metal shed 0.29% or $0.10 per ounce to $33.07 per ounce, recording the highest at $33.34 and the lowest at $33.01 after starting the session at $33.17 per ounce.
Platinum however gained 0.12% or $1.88 per ounce after the opening of $1581.25 per ounce to currently trade around $1583.63 an ounce. The metal recorded a high of $1588.25 and a low of $1577.50 so far.
Palladium followed gold and silver and shed as much as 0.58% or $4.00 per ounce after the opening of $693.00 per ounce to hover in the moment around $689.00 per ounce. The metal set a high of $696.75 and a low of $688.75 per ounce.