Gold and silver hold onto gains, investors await a raft of data for market direction
Gold is holding steady above $1,730 an ounce this morning while silver hovers just below $34, a surprisingly high Chinese inflation number supported prices, while investors also focused on Greece’s debt talks for direction.
Gold came under pressure as the euro softened after Greek political leaders failed to conclude a deal for a bailout package crucial to avoiding a messy debt default, but the higher-than-expected inflation data out of China helped bullion pare early losses.
The inflation data may temper hopes of aggressive easing by China’s central bank in the near term, but many economists expect inflation to ease February onwards, leaving China’s policy of targeted monetary and fiscal easing intact. Gold is seen as a good inflation hedge and benefits when accommodative monetary policies raise inflation outlook.
Though Greece is widely expected to reach a deal with its international lenders on the bailout deal, its trouble is likely to go on, supporting safe-haven interest in gold in the longer-term, analysts and traders have said.
The line-up of data that investors will focus on today includes UK Trade Balance and Manufacturing Production, US Jobless Claims and Wholesale Inventories, the main focus though will be on monetary policy meeting of the Bank of England and ECB; while both are expected to keep rates on hold the BoE is expected to increase its Asset Purchasing facility by £50bn while ECB President Draghi’s speech will be under close scrutiny for sign of further rate cut next month.
For more on gold and silver click on the links below;
Hathaway – People Are Right to be Scared & Gold is a Necessity
Copper Futures Advance to 20-Week High as China Moves to Support Housing
2012 Silver Forecasts: Are Analysts On Target?
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