By FXEmpire.com
Gold futures revived yesterday’s loss at the early Globex and the Euro edged up further from the pit ahead of the meeting by the Group of seven financial policy makers. Asian shares hold the nerves amid optimism that the leading chiefs will embrace emergency talks to lessen the Euro zone crisis. The Euro is therefore likely to be resilient today especially after France and the EU commission signaled support for an ambitious plan for a direct use of Euro zone’s crisis funds to shield banking default. On this back ground, gold is also expected to remain strong for the day but the gains may remain limited owing to the RBA’s cash rate decision. There are some crucial meetings lies in this week starting with the G7 today, followed by the ECB meet tomorrow and a verdict from the Fed chairman to testify the US economic condition on Thursday. It is therefore appealing to see the conversations of G7 ahead of the ECB meet and we expect some pressure to be built on the ECB for proactive steps. Hence, the week’s volatility has inspired speculation for an early stance by the ECB. However, it is unexpected for a sizable stance ahead of the much talked Greek re-election on June 17. Nevertheless, according to the need, any clue for supplementary cheap loans may support gold to climb.
The Reserve Bank of Australia’s cut its Cash Rate by 25basis points this morning. This will hurt the Australian dollar and in turn gold, since both of them shares a near 90% positive correlation. So, a deeper cut would upset gold’s strength today. Reports today from the eurozone and Germany are still expected to remain subdued. PMI numbers and a weak German factory orders may keep the Euro under stress for a while.
Silver futures prices are also quoting higher by 0.71% amid optimism of the G7 meeting where the ECB nay come under pressure for a policy action in terms of cheap loan or bond buying to support the wrecked financial condition in Euro zone. Euro therefore is likely to remain resilient for the day and that may also support silver prices. The week is full of events and today it is worth to watch the emergency talks of G7. We expect some pressure to be built on the ECB for proactive steps. However, it is unexpected for a sizable stance ahead of the much talked Greek re-election on June 17. Nevertheless, according to the need, any clue for supplementary cheap loans may support silver to climb. Reports today from the eurozone and Germany are still expected to remain subdued. PMI numbers and a weak German factory orders may keep the Euro under stress for a while. So, silver may also have a restricted upside today.
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Originally posted here
