Gold and silver started the week with moderate gains along with the sharp gains recorded in other major commodities prices such as crude oil prices. Today, U.S Consumer Confidence report will be published; Canada’s Core Retails Sales report; and Canada’s Overnight Rate will be announced.
Gold inclined on Monday by 0.99% to $1,652.3; silver also rose by 1.45% to $31.64.
Euro Summit – Round Two Tomorrow
Tomorrow, the second of two EU summit will be held. The first meeting was held on Sunday and didn’t bring much news. There are still gaps between the EU leaders and the position of the IMF and private sectors banks: the former consider there should be at least a 50-60% hair cut on the Greek debt, while the latter offer only a haircut of 40% on the debt. Some consider that the European debt crisis will take at least 5 to 10 years to resolve.
As long as there are huge gaps among the institutions involved the major commodities and the US stock markets are likely to benefit from this debacle.
AngloGold Is Boosting Production
According to Bloomberg, AngloGold is planning to boost its production capacity in order to benefit from the sharp gains in gold price. It’s suggested that the representatives of the company consider that the gains in gold is due to a fundamental change in the precious metals markets. I think it’s best to take such an analysis with a grain of salt.
That being said, Hedge funds are renewing their bullish bets in raw materials over the expectations that the U.S. economy is showing signs of recovery.
USD / Gold & Silver– October
The Euro/USD slightly inclined on Monday by 0.24% to reach 1.3930; this was the fifth straight business days in which the Euro traded up against the USD.
Gold and Silver Outlook:
Gold and silver rose again on Monday; gold and silver are currently traded slightly up; the renewed interest in raw materials by Hedge funds may have stimulated the gold and silver traders to go bullish on these metals. Furthermore, the ongoing uncertainty revolving the European debt crisis is also likely to drive traders towards safe haven investments.
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Lior Cohen, M.A. commodities analyst and blogger at Trading NRG.