Gold extends the gains recorded earlier
Gold continues to trade positively as investors demand the metal as a safe haven amid the general pessimism and the heavy fluctuations seen with the mixed sentiment and the flow of heavy fundamentals from major economies, awaiting more critical data during the week, including rate decisions from Europe and Australia and jobs report from the world’s largest economy, which also support gold as a hedge against inflation.
Gold opened the session at $1617.90 per ounce, and then recorded a high of $1664.55 and a low of $1617.90, and is currently trading around $1653.95 per ounce. Moreover, the euro-area finance minister gathered today to discuss the enhancement of the European rescue funds (European Financial Stability Facility) and the risk associated with a Greek default, awaiting the results taken by lawmakers to ease the jitters in the zone.
Greece could miss the next tranche of 2010’s bailout package due in October and could also lose the second bailout package in case the nation was unable to reach the targets set by international lenders (International Monetary Fund, the European Union and the European Central Bank). Furthermore, international lenders sent inspectors to Greece for the second time to determine whether Greece is committed to the austerity measures and is eligible to receive the next installment in light of the new measures taken.
The question here is that will Papandreou be able to pass these more difficult measures through the Greek parliament again, especially after the general strikes and the strong opposition of spending cuts and rising taxes, raising doubts that the Greek government could fail to apply measures and meet targets set by lenders.
Moreover, the Europe region unveiled manufacturing data for September today, reflecting mixed manufacturing sectors among different countries, where the German and euro-area manufacturing sectors contracted less than expected, while the United kingdom manufacturing sector rebounded from contraction in August into expansion in September, and finally Switzerland was the worst with further contraction.
Among other precious metals, silver’s positive momentum weakened after reaching a high of $31.37 per ounce, to currently trade around $30.55. The metal opened the session today at $29.66 per ounce, and recorded a low of $29.58 per ounce.