The shiny metal advanced today, extending the gains recorded in the past sessions, setting a new historic record at $1877.73 per ounce, affected by the downbeat global growth outlook and supported by the sluggish fundamentals worldwide, where the yellow metal gained as demand for safe haven surged.
The yellow metal continues the upside journey despite the several attempts from lawmakers to ease the tension and fears in the market in addition to the attempt of reducing the attractiveness of gold, where raising the margins on gold contracts affected the metal to trade lower, but as we expected the effect was temporary. Investors keep on holding the shiny metal despite the high margins due to the fears after the frequent huge losses seen across the board.
The weak fundamentals yesterday supported the negative outlook for growth and fueled the fears of contraction, while the yellow metal gained after spending levels in the U.K seem to be retreating, in addition the euro zone construction output dropped further. In the world’s largest economy, inflation is still above the fed’s target and advanced in July adding more pressures on the economy, while the initial jobless claims rose in the past week; moreover, the housing sector’s performance unexpectedly retreated in July as existing home sales retreated to 4.67 million from the revised previous of 4.48 from 4.77 million and below the expected improvement to 4.90 million.
In Europe, the worsening debt crisis forced further pressures on the sluggish growth in the zone, where inflation are rising and growth is slowing, while lawmakers and central banks are unable to fix the situation as tightening monetary policy could support inflation to retreat, however, this will affect growth negatively, which is already slowing quickly.
Volatility and heavy fluctuations are expected today, while jitters and pessimism will remain highly effective in the market, as uncertainty is dominant and investors are to hold more shiny metal until signs of advancement is seen in regards to the debt crisis and the weak growth across the globe.
By
M.Zohaib Gadit
Forex Trading Consultant
The yellow metal continues the upside journey despite the several attempts from lawmakers to ease the tension and fears in the market in addition to the attempt of reducing the attractiveness of gold, where raising the margins on gold contracts affected the metal to trade lower, but as we expected the effect was temporary. Investors keep on holding the shiny metal despite the high margins due to the fears after the frequent huge losses seen across the board.
The weak fundamentals yesterday supported the negative outlook for growth and fueled the fears of contraction, while the yellow metal gained after spending levels in the U.K seem to be retreating, in addition the euro zone construction output dropped further. In the world’s largest economy, inflation is still above the fed’s target and advanced in July adding more pressures on the economy, while the initial jobless claims rose in the past week; moreover, the housing sector’s performance unexpectedly retreated in July as existing home sales retreated to 4.67 million from the revised previous of 4.48 from 4.77 million and below the expected improvement to 4.90 million.
In Europe, the worsening debt crisis forced further pressures on the sluggish growth in the zone, where inflation are rising and growth is slowing, while lawmakers and central banks are unable to fix the situation as tightening monetary policy could support inflation to retreat, however, this will affect growth negatively, which is already slowing quickly.
Volatility and heavy fluctuations are expected today, while jitters and pessimism will remain highly effective in the market, as uncertainty is dominant and investors are to hold more shiny metal until signs of advancement is seen in regards to the debt crisis and the weak growth across the globe.
By
M.Zohaib Gadit
Forex Trading Consultant
No comments:
Post a Comment
Feel free to comment.