Gold surged today to recover some of the huge losses incurred in the past week and yesterday, affected by the high level of uncertainty in Europe, as the Slovenian Parliament is to vote on expanding the powers of the European Financial Stability Facility today, while Germany and Finland are to vote on the expanded powers during this week as agreed in the July 21 summit. The yellow metal opened the session today at $1626.93 per ounce and recorded the highest at $1657.87 and the lowest at $1614.83 per ounce, and trades now around $1656.40 an ounce, recovering the losses incurred yesterday after the metal reached a low of $1532.40. Moreover, the mixed U.S. dollar has also affected the metal’s movement, where yesterday the common currency rebounded after reaching low levels against the dollar, which forced the greenback to retreat, easing some of the downside pressures on dollar-denominated commodities, including gold, silver and crude oil. Gold returned to gain momentum as the huge losses seen across the board left investors with no choice but closing their positions on gold in order to cover their widely spread losses, where after the Federal Reserve announced the “operation twist” instead of another round of quantitative easing, the dollar gained more strength, as quantitative easing suggests more dollar supply and less value, reflecting huge losses across the board. Moreover, Greece remains the main focus in Europe as rising debt concerns and renewed fears over a Greek default are still dominating investors and markets, while volatility and heavy fluctuations are controlling the markets amid the high level of political uncertainty and divisions between members in the European Union on the mechanism to overcome the debt crisis once and for all. Starting from today, CME group raised margin requirements on gold, copper and silver futures, by 21%, 18% and 16% respectively, in order to hold the metals at steady and normal prices after gold was overbought for long period, where the group raised margins for the third time to control the rapid incline seen on the metal and to make it less attractive for investors. Among other precious metals, silver also advanced today after the opening of $30.65 per ounce, recording a high of $31.84 and a low of $30.21 and is currently hovering around the highest level at $31.72 per ounce. Spot platinum surged today by 1.59% to trade now around $1569.63 an ounce, while palladium was a little changed at $638.50 an ounce, rising by 1.96% as of (3:35 EST). |
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