Gold reversed to the downside today after reaching the highest at $1640.47 per ounce, to currently trade around the opening level at $1618.20. The metal also fluctuated heavily during the session, reaching a low of $1609.45 per ounce, noting that the metal opened the Asian session at $1614.47. The U.S. dollar advanced today against other major currencies amid rising jitters and woes in middle of the general pessimism which returned to dominate markets, especially after inflation climbed in the euro zone and unemployment lingered at high levels, while the downbeat income report from U.S. supported the dollar to gain momentum, reflecting worse economic conditions and spreading pessimism through currency and stock markets, which provided gold with mixed demand, as investors hold more gold as a safe haven and a hedge against inflation, while the dollar index pressured the metal down as we can see gold moving within a narrow range now. The euro zone released the consumer price index flash estimate for September, where inflation rallied to 3.0% from 2.5%, adding more pressures on the European Central Bank, especially after expectations in the market pointed at the possibility of cutting rates by 0.5% in the next meeting; however, rising inflation could force the Bank to stand still and take no further steps in order to control rising inflation along with supporting growth and recovery. The euro zone released the unemployment rate for August, where unemployment lingered at 10.0% in line with expectations. The U.S. dollar returns to trade higher today after the losses seen in the past session, forcing downside pressures on other major currencies and commodities, where we can see the greenback gained strength against the euro, the sterling pound, the yen, Swiss franc and Canadian dollar. The U.S. dollar index (USDIX) rebounded sharply to the upside after opening the session today at 77.86, recording a high of 78.63 and a low of 77.82, and is currently hovering around 78.50. Silver also gave up all the gains recorded earlier, where after opening the session at $30.50 per ounce, the metal set the highest at $31.27 and the lowest at $29.88, and is currently trading around $30.50 per ounce. |
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