Although the markets greeted the news of the passage of the austerity measures with the enthusiasm that one might have expected, the ’celebrations’ were rather half-hearted, as reflected in the gains in various assets.
Spot precious metals dealings opened on the weak side with all four principal metals that we track losing more than 1.2% and up to 2.1% percent. Spot gold was down nearly $25 at $1,704 per ounce while silver was bid near $33.25, down 60 more than cents.
Gold prices meandered on either side of the "unchanged" marker this morning and orbited around the $1,745 area as the US dollar did not appear to pierce the 78.50 level on the trade-weighted index following yesterday’s euro-centric optimism-induced sell-off.
Gold’s worst loss on over one month showed signs of continuing to deepen as markets opened for trading in New York this morning. The uncertainty manifest in the European news flows on Monday kept the selling pressure on in the precious metals and commodities’ complex.
The near-term in Europe might be darker than many currently anticipate (as reflected in January’s asset-buying euphoria) if we take note of certain underlying trends. An injection of liquidity has not resulted in an injection of loans into the region’s faltering economy, for example.
Spot metals dealings opened higher across the board on Wednesday as the specs extended that which they successfully carried out in January for yet another session’s worth. Gold opened near $1,745 with a roughly $7 gain per ounce.
Precious metals – with the exception of palladium – opened mildly higher this morning in New York as players awaited US GDP and consumer sentiment data with a degree of caution and as profit-takers stood by to possibly pull the trigger.
Momentum players pulled the “buy” trigger on precious and base metals, along with crude oil and equities, yesterday afternoon, after they concluded that the Fed’s offer to not hike interest rates until late 2014 was tantamount to a fresh QE program.
Gold prices fell for a second session on Wednesday as physical demand remained muted and as the US dollar picked up additional strength against the euro. Market participants were focused on upcoming Fed and Davos World Economic Forum statements.