Optimism in financial markets push gold south
Gold traded last Friday with some positivity, but overall it suffered its first weekly drop in five weeks; trading today also is leaning negatively amidst the ongoing profit-taking on the shiny metal. Meanwhile, stock and commodities have attracted the demand away from gold as investors head towards risky assets.
US stock indices on Friday traded to the upside; the Dow Jones rose by 0.46%, alongside European indices also climbing. On the other hand, today Asian indices moved to the upside amidst ongoing demand on stocks, due to the optimistic wave currently overwhelming global markets; Japan's Nikkei ended higher today by 0.89%; and Hang Seng also managed to gain 1.81%.
Today, US indices futures traded with clear positivity and crude climbed; where current economic data relieved traders regarding the global economic slowdown by showing that it will not suffer a double dip that several people feared. Meanwhile, a wave of optimism has overshadowed markets where expectations mark a minor slowdown in the recovery pace, with ongoing signs of economic growth continuing at a steady pace.
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Last Friday, gold closed around 1246.70 gaining 0.22% but managed to touch levels close to former record levels around 1265.00 this week, as the shiny metal touched $1262.00. Speculators returned to profit taking after the metal failed to breach the previous record followed by a wave of selling from investors that had discarded gold as a safe haven.
On the other hand, silver last week managed to also traded above $20.00 per ounce but was not able to stabilize above this level for long, where profit taking took the metal lower on facing the psychological barrier; silver traded last Friday around $19.88 per ounce despite of the recorded rise of 0.71%.
Traders are currently heading to stock markets than precious metal markets; platinum witnessed a drop throughout Friday's trading session and thereby reflecting gold and silver sentiment. Stocks and numerous commodities provide good investments if fear depletes in financial markets, specifically since inflation levels remain relatively low and central banks all over the world insist on continuing their incentive plans aimed at boosting the economy in surpassing the worst credit crisis since the Great Depression; the European economy relatively stabilized despite of the sovereign debt crisis gripping the region.
As for precious metals today, we find that gold is still facing slight negative pressure whereas silver and platinum climbed. Gold as of 03:26 EST traded around $1245.30 per ounce, dropping by 0.11%; whereas platinum and silver today rose by 0.45% and 0.30% consecutively. Silver, however, presently trades around $19.96 per ounce while platinum trades around $1547.00 per ounce.
On our economic agenda this week, we have several vital data such as inflation and growth for several major economies. Overall, confidence currently is climbing in financial markets although it still remains unstable, thereby we cannot rule out witnessing more attempts to head to the upside; however, if it fails we could witness some negative pressure due to another profit taking wave. Keep in mind that overall direction for gold today is still to the upside and is expected to remain so throughout the day.
