Yesterday proved to be a volatile day for traders with investors going against the charts and belying the fundamentals in order to position themselves before the Spanish 2 and 10 year bond auctions later today. Seen as the real litmus test of market confidence, particularly with the Euro, investors positioned themselves in Gold and the USD ahead of today’s auction.

Helping keep the investor focus firmly on Europe was yesterday’s announcement by the Italian Government slashing its forecast for the economy for 2012.It was previously forecasting a 0.4% contraction for the economy, but this has no been revised to a forecast of  a 1.2% contraction. This is better than what the IMF believes, who predicted a 1.9% contraction by the end of 2012 and the Italian government has increased its 2103 growth forecast from 0.3% to 0.5%.

The increased trader movement saw Gold reverse most of its losses and is currently 0.03% up, valued at 1640.05. Silver which also saw gains yesterday, suffered from some profit taking which meant the price had declined to 31.468, down 0.06%.

The greenback fared relatively well in yesterdays trading, making gains against most major currencies as investors looked for a safe haven to put their money into. As Asian trading progresses, pre – European trading starting, the USD was pegged back by investor reluctance ahead of today’s auction with the US Dollar Index unchanged at time of writing as is the EUR/USD pairing. The biggest increase for the USD was against the JPY, up 0.28% valued at 81.48 as Japan announced that its trade balance fell higher than anticipated last month, falling to a seasonally adjusted -0.62 Trillion, from -0.32 Trillion in the previous month whose figure was revised down from -0.31 T. Analysts had predicted that the trade balance would fall to around 0.43 T last month.

Today : 9.30am GMT – EUR – Spanish Debt Auction
1.30pm GMT – USD – Initial jobless claims in the US.

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