Gold prices were able to stay above $1,600/oz on Wednesday maintaining most part of its gain from the previous session. The continuous struggling of Spain to maintain economy by borrowing costs worried many investors. The Euro Zone debt crisis has surely affected the gold’s “Safe Haven “status and put financial markets on hold. International gold prices will be unstable for short period of time following Spanish worries to retain their financial system. There is great uncertainty whether Spanish banks will gather sufficient support, if bailout package is requested. The present explosive situation of the Euro Zone is on the verge of affecting seventeen nation monetary unit and world's reserve currency.
The increasing gold prices will undoubtedly a turning point in strengthening Euro Zone, US dollar and Euro. Eventually, there are many expectations from experts that the price of the gold will experience rise in the following days due to the recent US weak job rate as well as China’s fresh rate cuts. If the economy deepens further, it will have a huge impact on gold price. Investors stayed away from gold market in this week owing to the Italian bond sale and Greece elections. Many shifted their interests towards other assets. Tuesday witnessed Spanish 10-year bond yields hit their highest in the history of the euro zone at 6.73%, which edged closer to the 7 percent danger level. Italian bonds also climbed to a record 6 months high. These factors fueled doubts and suspicions over whether Madrid’s ability to keep tapping bond markets after a banking bailout.
Gold dealers believe that if the Euro bond continues to soar, then gold could perform well in the future. The fluctuating and recent slump in international gold prices has caused a greater impact on gold investment. Gold jewelers in India are not satisfied with unpredictable price of the gold and complained about the decrease of 50% in daily gold jewelry sales. Some jewelers say that the volatile pricing of the yellow metal is expected to carry on for the next 6 months. Although the gold price is floating above $1600 mark, there is not enough demand from India. On the other hand, silver prices also rose higher gaining 1.72% and moving to $28.99 an ounce. Platinum also rose gaining 1.13% and climbing to $1,452.49 per ounce. Spot palladium moved to $622.97 an ounce gaining 0.96%.