Gold is trading at 1277.65 while silver is trading at 19.545 this morning. Gold fell in New York as prospects that the Fed Reserve will reduce monetary stimulus curbed demand for the metal as a protection of wealth. Silver also slipped and platinum plunged to the lowest since November 2009. Traders will be closely watching todays slew of US data, which could give direction to the Federal Reserve decision as to when to begin tapering its programs. Traders will see durable goods orders and housing data which are both expected to print higher than forecast. The rest of the trading day should remain quiet and focused on news flow as there is very little data due out before the North American session.
This morning, most of the Asian equity markets are trading on the higher side, barring the Chinese markets which are down more than 4.5% on the back of concerns caused by the credit crunch. The subsequent announcement by the People’s Bank of China that it may not inject liquidity further added to the concerns. The euro is trading flat at 1.3120. The dollar index is also trading flat at 82.45. There are no major economic data releases expected from the euro-zone. However, a string of data releases from the US in the evening such as durable goods orders, the S&P Case Shiller home price index, House price index, consumer confidence index and new home sales are expected to be positive, which may support the dollar index.
Gold futures saw renewed selling pressure on Monday, as global equity markets fell on concerns over tightening credit conditions and growth worries in China. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 985.73 tons, as on June 24 while silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,881.87 tons, as on June 24. Silver traders are taking advantage of the tumble in prices to buy on the cheap, which is helping to limit losses.
Copper closed at its lowest level in almost three years on the London Metal Exchange Monday as investors cashed out of base metals amid a continuing credit squeeze in top metals consumer China. At the close, LME three-month copper was 2.2% lower on the day at $6,670 a metric ton. The metal earlier tumbled 3.0% to $6,613 a ton, its lowest price since July 2010. Aluminum closed 1.2% lower at $1,771 a ton.