The final trading session of this second week of intense world events opened on a mixed note in various assets. Investors continue to digest fast-moving news stories and attempt to keep one step ahead of volatility and counterintuitive market moves.
Opposing forces are battling for control over gold price action as sentiment looks for direction while the recent bout of US dollar weakness put silver prices on a parallel track with risk appetite trends.
The advent of the United Nations' Libyan no-fly zone and the prospect of military action lifted crude oil prices in a hurry and that spark in the markets brought precious metals speculators back to the feeding frenzy trough equally fast overnight.
The sharp decline in oil, along with an initial 0.61% gain in the US dollar on the trade-weighted index made for a wobbly start in the precious metals' complex. Gold spot prices opened with a loss of $12.60 per ounce and silver with an 87-cent drop.
Spot metals dealings started the midweek session with decent gains across the board. Gold was bid at $1,435.70 per ounce (up $6.80) in New York, while silver advanced 27 cents to open at $36.32 on the bid side.
Renewed fears over eurozone debt have seen the euro fall against most currencies and precious metals today. The yield on Greek 10-year bonds is approaching an alarming 13% after jumping to a new record high of 12.89% today.
Gold prices traded in a $21 range from $1,416.60 to $1,437.50 and silver gyrated over an 84-cent range as the sellers (and very few buyers) duked it out in the first hour of trading Thursday. Platinum and palladium players also took profits.
Traders returning to work found largely the same conditions that they had left work amid on Friday; no resolution to the Libyan upheaval, continued weakness in the US dollar, and suggestions from various Fed 'factions' on changing US interest rates.
Gold and crude oil have a relationship - and one that investors might be able to exploit, if they know what tools to use. Historically - on average - one ounce of gold buys 15.4 barrels of crude oil. This is the Gold-Oil ratio.