Intraday Market Thoughts

Archived IMT (2010.05.26)

by Ashraf Laidi
May 26, 2010 4:45

GOLD THE NEW ANTI EURO: Gold price action is increasingly tied to the euros broad performance and less so to the USD. Since March, the yellow metal has proven to be among the few safehavens away from the Eurozone sovereign woes to the extent that the correlation between GOLD/USD and EURUSD has become notably negative. Not only are European investors seeking refuge into the safety of gold at each and every release of bad news, but this also spilled on to the price of gold vs. other currencies. This was clearly manifested last week during the bounce in the euro (resulting from SNB intervention and rumours of the same from ECB), which coincided with falling gold from 1200 to 1160s. Staying away from the euro, traders assaulted the Aussie, loonie and Kiwi. But things did change on Monday and Tuesday when renewed EUR selling (Bank of Spain seizing savinsg bank and ECB buying fresh govt bonds) lifted gold against all currencies, WATCH ASHRAF's TAKE ON GOLD AND THE EURO in yesterday''s CNBC intrerview


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