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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 8936
Posted: Feb 22, 2010 5:00
Comments: 8936
Forum Topic:
Gold, Oil & Indices (Equity & Bond Indices)
Discuss Gold, Oil & Indices (Equity & Bond Indices)
The right shoulder is getting testy
http://bit.ly/gcP5af
Ashraf
rare medium-rare
could you please say something about USDCHF. It's not moving. Thanks.
Another Monday in US equities bounce ignored by Tuesday in Asia.
Using the Dow-30 as a reference, the index closed down 39 pts, recovering from an intraday loss of 154 pts. Despite the rebound, the Nikkei dropped 189 pts Monday (-1.9%), with all other Asian indices closing in the red. An almost identical pattern occurred last Monday, when the Dow-30 had an intraday loss of 147 to later recover and close only 23 pts down. The losses in Asia could be explained away by recurring worries of a Chinese rate hike and reports that a large US bank will be at the centre of the next Wikileak revelations.
Ashraf
Gold extended its gains vs. the euro to hit a fresh record high of 1,066/oz amid surging Eurozone bond spreads and a broadening selloff in the single currency. This is a repeat of the Feb-June period when the yellow metal broke to new highs due to uncertainty with Greece and Spain. And just as last Spring, today the inverse relationship between USD and gold is breaking down as both are rallying against the single currency. As a result, the impulsive (main) move of rising Gold/Eur leads to an indirect gain in Gold/USD. The rally in Gold/Eur reflects European investors refuge towards the safety of the yellow metal, which consequently leads to the metal rallying against all other currencies, albeit at different degrees. The European worries of Ireland, Portugal and Spain are prompting a classic refuge to safety, whereby both gold and the Swiss franc are outperforming the majority of currencies.
Ashraf