European debt worries exacerbate rising volatility in gold prices

【Reviews】

The Italian 10-year bond yield hit a new high of 6.67% since the advent of the euro on Monday, only slightly lower than the 7% reached by Greece before it received assistance from the European Central Bank (ECB) and the International Monetary Fund (IMF). In addition, the Italian opposition party is preparing to issue a no-confidence motion to the government and Berlusconi faces a resignation. Berlusconi's regime is in jeopardy and European debt worries intensify. On Monday (November 7th), spot gold has risen sharply in intraday trading. It is only a stone's throw away from the thousand-eighth level. Spot gold hit a maximum of 1,798.09 US dollars / ounce, the lowest dropped to 1,752.09 US dollars / ounce to close at 1,793.59 US dollars / ounce, the previous day to close at 1,755.50 US dollars / ounce, up 38.09 US dollars / ounce, or 2.17 %.

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The Italian 10-year bond yields on Monday (November 7th) hit a new high of 6.67% since the advent of the euro, only slightly lower than the 7% achieved by Greece before it received assistance from the European Central Bank (ECB) and the International Monetary Fund (IMF). Level. Many analysts said that if the yield is higher than 7%, then the country's cost will be difficult to sustain.

There are market rumors that the European Central Bank is continuing to buy Italian bonds in order to make the country’s national debt yields “unsustainable”. However, under the continuous intervention of the European Central Bank's bond market, the momentum of the rise in the yield of Italian government bonds is still “wild fire, spring breeze”.

The European Central Bank has intervened in the bond market in the week of Aug. 12 after maintaining a pattern of “market outlook” for 19 consecutive weeks. The main objective is to rescue the Italian-Israeli bond market from the further spread of the debt crisis in the Eurozone. However, Mario Draghi, the new president of the European Central Bank, mentioned in his inaugural speech that the European Central Bank’s debt purchase plan will be a "temporary move," while the scale of purchase of bonds is "limited."

German Finance Minister Wolfgang Schaeuble said on Monday that the situation in Italy cannot be compared with Greece, but the country must self-monitor its implementation of the announced reform measures to regain market confidence and avoid further deterioration of the debt situation. Berlusconi denied rumors that he will soon step down, but market sources said that this may be the only way for Italian government bond yields to get some much needed relief.

An analyst team at Unicredit said that Berlusconi will soon call for a vote of confidence, and if he fails to receive parliamentary support as he did several times before, Italy will form a new interim government.

Marcus Hettinger, global strategist at Credit Suisse, stated that “a new government or a new leader may receive more support from the parliament and may implement more reform measures. The euro has gained a short-term boost, but in the long run, the situation in the euro zone is not suitable for the strengthening of the euro.

[ETF]

The world’s largest gold exchange deal**(ETF)--SPDR Gold Trust said that as of November 08, the gold holdings were 1,255.65 tons, an increase of 10.59 tons over the previous trading day.

Technical side

In the international gold spot market, the candle on the daily level has further risen and climbed, and the whole team has come out with a bald, barefoot line that clearly demonstrates the willingness to attack. The short-term moving averages support the gold price, but the short-term oscillator still operates in the overbought range. From the perspective of the overall daily candle, the upswing is still not over. In the 4-hour candlestick chart, each EMA showed a clear bullish state distribution. The bullish energy was still sufficient, but there was a short-term shock recovery demand after continuous pull up.

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