Gold rose slightly today taking advantage of a weak dollar amid hopes that Greece might get the long-awaited second batch of alongside positive Chinese data.
The sentiment was hit once again after as European finance ministers and the IMF failed to reach an agreement to make Greek debt load sustainable, delaying the release of the needed aid tranche after eleven hours of talks. German Chancellor Angela Merkel stated that she is confident about reaching an agreement on next week’s meeting, which gave the markets the slight push.
EUR/USD pair recorded a 3-week high pushing the dollar to the downside. The dollar index (USDIX) fell from the highest set in two months at 80.81 levels to hover today around 80.80 areas recording the high of 80.92 and low of 80.75.
China`s manufacturing sector expanded in November unexpectedly for the first time in 13 months according to the HSBC flash estimate, a positive sign that China is starting to return on track and will avoid a hard landing seven consecutive quarters of slowdown.
So far, determining the path of gold is a hard task especially amid the high uncertainty surrounding the outlook for Europe and the U.S.
Moreover, the impact of Obama’s positive statements assuring investors that an agreement will be reached to resolve the fiscal cliff have started to wane. The Federal Reserve`s Chairman Ben Bernanke warned from the so-called “fiscal cliff”, pointing out that applying it would force the U.S. economy into another recession.
Thus, if Eurogroup and the IMF leaders manage to indeed reach a sustainable solution for Greece’s debt outlook and release the tranche that will ease the uncertainty and support the risk appetite, pressuring the dollar to the advantage of gold.
Gold prices are hovering around $1730.00 per ounce with the start of the European session, recording so far the intraday high of $1732.34 per ounce and a low of $1728.36 per ounce hovering marginally higher from yesterday’s closing by 0.10%.
Among other precious metal, silver rose to the highest in a month at $33.42 per ounce. Silver traded within a tight range around $33.33 per ounce at the time of this report.
Precious metals are expected to resume a choppy thing trading day with the absence of Wall Street in celebration of Thanksgiving.
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