Gold, Oil & Indices (Equity & Bond Indices)

RBS: Get Ready for the Cliff Edge

Just one excerpt:

RBS says housing is in the lynch pin in the whole economy and that the next leg down will trigger the collapse:

First, we have been waiting for the last of the US fiscal easings, the first time homebuyer tax credit, to pass, and have been arguing strongly for some weeks to investors to get ready for the violent turn down which is about to occur. And the trigger (not the only reason, but the trigger) is the US housing market. This is all falling into place lovely. Last week saw the NAHB housing index dip; housing starts at -10%mom (6.3% under consensus), and building permits -5.9%mom (8.4% under consensus). This week has seen existing home sales -2.2% (8.2% under consensus); and new home sales -32.7%mom (14% under consensus). Our theme is building. The BoE financial stability report today shows there is a surplus of 1.75m housing units built since 2006 and even with normal household creation, this will take two years to remove. So the weak housing theme should now pollute its way into consumers, and kickstart the rebuilding of the savings rate (just 3.6% and delayed from rebuilding by the fiscal/monetary shock and awe).
http://pragcap.com/rbs-get-ready-for-the-cliff-edge

It appears correct Russian CB and Russian oligarchs were behind gold's hefty moves.
I expect gold's move capped between 1240 and 1250.

gold resistance at 1248 going short gold part now part 1245 tp 1205 stop loss at 1250 and move up with trend line

Nervous Yet My Maties, been busy shifting home but what conflicting week this has become already.


World stocks, commodity prices and the euro tumbled on Tuesday as risk appetite ebbed over concerns about the repayment of 442 billion euros ($545.5 billion) to the European Central Bank.

Gold inched higher and U.S. Treasuries rose, pushing two-year note yields to the lowest on record, as jitters over the euro zone debt crisis supported safe-haven demand.

Yields on the benchmark U.S. 10-year Treasuries fell below 3 percent for the first time since April 2009 as the euro hit an all-time low versus the Swiss franc and an 8-1/2-year trough against the yen.

Investors shunned riskier assets and traders cited significant U.S. dollar short covering overnight, further weighing on the euro.

The dollar was up against a basket of major currencies, with the U.S. Dollar Index .DXY up 0.71 percent at 86.26.

The euro was down 0.98 percent at $1.2157.

The risk premium on southern European government bonds over benchmark German bunds widened and the cost of insuring their debt against default rose.

"There is quite a lot of worries about the (U.S.) payrolls, worries about stress tests of European banks and also the rollover of ECB's long-term repo operations that will be taking place in the next couple of days," said Paul Robson, currency strategist at RBS Global Banking.

European shares slumped, with the FTSEurofirst 300 .FTEU3 index down 2.8 percent. Shanghai's equities index .SSEC plunged more than 4 percent and Japan's Nikkei .N225 was poised for its worst quarter since 2008.

Banks were among the heaviest decliners as they prepare to pay back the ECB money that was borrowed a year ago at rock bottom rates, leaving a potential liquidity shortfall in the financial system of over 100 billion euros.

Barclays, BNP Paribas and BBVA were down 3 percent to 4.1 percent.

U.S. stocks extended losses, dropping more than 2 per cent, after a weak reading of the Conference Board's U.S. consumer confidence index, which fell in June to 52.9 from a downwardly revised 62.7 the previous month.

The CBOE Volatility Index .VIX jumped more than 16 percent to a session high of 33.82 on news of the private business research group's confidence index.

Even though single-family home prices unexpectedly climbed in April from the previous month, signs of a sustained recovery have yet to emerge, price indexes from Standard & Poor's/Case Shiller showed.

The S&P composite index of prices in 20 U.S. metropolitan areas rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March, compared with a 0.1 percent decline forecast in a Reuters survey.

MSCI's all-country world index .MIWD00000PUS fell 2.7 percent and its emerging markets index .MSCIEF fell. 2.8 percent.

Shortly after 10 a.m., the Dow Jones industrial average .DJI was down 224.46 points, or 2.21 percent, at 9,914.06. The Standard & Poor's 500 Index .SPX was down 25.39 points, or 2.36 percent, at 1,049.18. The Nasdaq Composite Index .IXIC was down 65.29 points, or 2.94 percent, at 2,155.36.

Oil prices fell more than 3 percent to below $76 per barrel and copper shed more than 4 percent as concerns about economic recovery weighed on market sentiment.

U.S. light sweet crude oil fell $2.64 to $75.61 a barrel.

ICE Brent fell $2.47 to $75.12.

Benchmark 10-year U.S. Treasury notes were trading 14/32 higher in price to yield 2.97 percent. Bond yields move in inverse relationship to their price.

Against the yen, the dollar was down 0.92 percent at 88.53.

Russian 'spies,' goldbugs and the struggling dollar
Was the alleged Russian spying, in part, a commodities or currency play?

by Heidi N. Moore, contributor

When federal officials arrested 11 alleged Russian spies yesterday, it seemed natural that the accused agents would be interested in the CIA leadership, the Obama administration and Afghanistan. But who knew that they were goldbugs?

James G. Rickards, senior director for market intelligence at Omnis, pointed us to the fact that the FBI complaint mentions that the global gold market was one of the key sources of interest of the Russian Federation and its intelligence agency, SVR.
"On a number of occasions, the SVR specifically indicated that information collected and conveyed by the New Jersey conspirators was especially valuable. Thus, for example, during the summer and fall of 2009, Cynthia Murphy, the defendant, using contacts she had met in New York, conveyed a number of reports to [Moscow] Center about prospects for the global gold market."

According to the complaint, the SVR responded in November 2009 that the information on the gold market was very useful and had been forwarded to Russia's Ministry of Finance and Ministry of Economic Development.

If Russia wanted information on the gold market, it would hardly be alone. In 2009, of course, gold jumped 24% in value, closing the year at $1,095 an ounce -- a price that seems quaint now that gold is over $1249 an ounce, but was still the biggest story in the financial markets of 2009.

Murphy's alleged tips about the gold market must have been quite powerful. It's impossible to tell how they influenced Russian economic policy or thinking, but we can look at some of Russia's moves at the time and notice some striking trends that show that Russia dramatically reversed its stance on gold in late 2009.