By Commoditiesmansion.com – Gold started the week on Monday with some upside tendency as investors bought the metal on lows after three days of consecutive losses.
The volatility for gold remains evident and was powered on Monday with the weak dollar and the absence of U.S. markets on Independence Day.
We can see the metal struggling to retain its appeal and was supported by the default warnings from S&P on Monday, where the agency said it might count the French proposal for the private sector participation on the new bailout as “effective default”.
With Greece still the focus, and rate decisions ahead with the RBA taking the lead on Tuesday the metal might be supported to the upside, especially as the RBA will not tighten its monetary policy to support growth leaving gold more appealing as a hedge against inflation as central banks delay their moves amid high uncertainty and sluggish recovery.
Fluctuations will be seen with downside pressure from the general eased fear with the finance ministers in the euro zone approving the July tranche and assuring Greek default has been prevented for now. While on the other hand, the dollar will add to the volatility and the metal remains pressured by $1,500 areas and we expect it to attempt to rise again on Tuesday, yet the general downside pressure remains evident unless the metal confirms the stability on haven demand and fear of Greece default and inflation pressures and reverse the trend to the upside.
The volatility for gold remains evident and was powered on Monday with the weak dollar and the absence of U.S. markets on Independence Day.
We can see the metal struggling to retain its appeal and was supported by the default warnings from S&P on Monday, where the agency said it might count the French proposal for the private sector participation on the new bailout as “effective default”.
With Greece still the focus, and rate decisions ahead with the RBA taking the lead on Tuesday the metal might be supported to the upside, especially as the RBA will not tighten its monetary policy to support growth leaving gold more appealing as a hedge against inflation as central banks delay their moves amid high uncertainty and sluggish recovery.
Fluctuations will be seen with downside pressure from the general eased fear with the finance ministers in the euro zone approving the July tranche and assuring Greek default has been prevented for now. While on the other hand, the dollar will add to the volatility and the metal remains pressured by $1,500 areas and we expect it to attempt to rise again on Tuesday, yet the general downside pressure remains evident unless the metal confirms the stability on haven demand and fear of Greece default and inflation pressures and reverse the trend to the upside.
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