Gold is probably girding for a weekly advance in the first week in the year after the sharp drop seen in December last year. The gold took a boost from the oil's advance to eight month high on the back of the tensions in Iran after the approval of the EU to impose a ban on Iran's oil imports, yet the questions remain will the shiny metal continue advance with the dollar's rally which is expected to cap the metal's gains and affected all other dollar-denominated commodities? Now, the dollar and yen are seen the only safe havens in the market; thus, with the worries stemming form the euro area the dollar is getting stronger. The dollar soared last week after a German bond selling witnessed a decline in demand to the lowest level in five years while the French 10-year bond yield rose amid concerns the euro area second-largest economy is at the brink of a downgrade to its top credit rating. Next week, eyes will be on Spain and Italy, where the former plans to sell bonds maturing in 2015 and 2016, while the later is expected to auction 3-, 5- and 15- year bills, where both countries may reach an aggregate bond selling of 262 billion euros in the first quarter, according to Deutsche Bank AG forecasts. Meanwhile, we are seeing the gold and dollar moving in the same direction which raises the question will the gold retain its safe haven characteristic which it lost by the end of last year? The dollar index, which tracks the greenback's movements versus six major currencies, soared to a high of 81.25 compared with the day's opening of 80.91. Spot gold is currently traded higher around $1625.65 an ounce, after recording a high $1628.93 and a low of $1616.63. The shiny metal got support from the critical physiological level of $1600. The shiny metal continued its rise after the non-farm payrolls report which showed high-than-expected job addition in December as well as a drop in unemployment. Crude oil also is traded high near eight-month high around $102.04 a barrel compared with the day's opening of $101.29.
|
To ensure you receive such e-mails in the future, please add ecPulse.com to your list of approved senders.
No comments:
Post a Comment