Markets

Low trading volume in gold and FX-markets

Late Asian session trading and ahead of Europe's opening session, trading was calm trading mixed with a drop in trading volume as investors reassess global conditions.

The European shared currency dropped against the dollar, on debt woes and the easing tension between South Korea and North Korea, causing the dollar to gain ground against high yielding assets, accordingly, reducing demand for gold as a haven and led a decline in the metal prices due to the inverse relationship with the greenback.

Gold for immediate delivery dropped to currently trade at 1,371.42 an ounce compared with the opening levels of 1,373.10 an ounce, while setting a high of 1,375.40 an ounce and a low of 1,367.92 an ounce.

The US dollar index traded near the opening levels at 79.79 where it managed to reach the highest at 79.85 and the lowest at 79.75.

Bullion for December delivery dropped on the daily scale by 0.16 percent, or $2.20, to trade at 1,372.80 an ounce.

Euro decline

Investor's jitters and woes caused the European shared currency to depreciate against majors, affected by the release of Ireland's budget cut plan, along with investors' anticipation for the bailout to be provided to the country.

The Irish government announced late Wednesday it will slash spending by nearly 20 percent in the upcoming four-years, along with raising taxes to slash deficit to 3.0 percent of GDP.

In addition, Welfare cuts of €2.8 billion will be implemented, along with raising income tax of €1.9 billion, aiming to save up to €15.0 billion by 2014. The Irish government forecast a growth rate of 2.7 percent annually over the upcoming four-years. This year's shortfall reaches 12 percent of GDP, excluding the cost of bailing out the banking system.

Other Metals

Silver sales are forecasted to rise in the upcoming period, as investors seek protection from inflation and wealth from the volatility they face in FX-exchange markets.

Silver followed the same pattern as gold where it fell slightly on the daily scale, where Silver for immediate delivery is trading at 27.39 an ounce, touching a high of 27.57 an ounce and a low of 27.32, compared with the opening levels of 27.55.

Projections for silver's trading set the metal to range between $20.0 - $25.0 for the remainder of the year, as the short-term direction still faces pressures rather than enjoying a bullish trend.

Platinum for immediate delivery dropped by $2.0 to trade at $1,655.00 an ounce, Palladium fell $1.0 to trade at $692.00 an ounce.

Technical Analysis for gold's trading today

Gold stabilized below 1380.00-1385.00 areas and thus the classical scenario is still in favor, accordingly, expectations signal that the the bearishness could dominate the movements over intraday basis . Stochastic is currently attempting to overlap negatively inside over bought areas, supporting the bearish outlook. A break of 1368.00 will accelerate the awaited movements to target 1,362.00 and 1,355.00.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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