Money and Metals

Reuters looks at what moved the US dollar today. "The dollar slid on Friday, weighed by concerns the Federal Reserve is close to the end of its dollar-boosting tightening cycle, and by higher oil prices and the inability of the U.S. currency to rise out of ranges."

"The Swiss franc, seen as a safe haven in times of increased market risk, drew some support after a senior Iranian official confirmed Iran had started transferring assets from European accounts to other foreign banks in an attempt to preempt possible United Nations sanctions over its nuclear program."

"In Tehran, a senior Iranian official on Friday confirmed comments from central bank governor Ebrahim Sheibani carried on Iran's ISNA student news agency that Iran had started transferring funds. 'Yes, Iran has started withdrawing money from European banks and transferring it to other banks abroad,' he told Reuters. There were no details on where the funds might go. The news spooked financial markets as they pondered the likely destination of Iran's funds, helping send oil above $67 a barrel and spurring the gold rally."

"Comex gold futures resembled base jumpers Friday, first they climbed to heights not seen in 25 years due to strong technicals and geo-political concerns, then jumped off a cliff on profit-taking. The other precious metals followed. The session was volatile, with a difference of $15.80 an ounce between the high and low in February gold and a tumble of 42.5 cents from the high to low in March silver."

"When the markets finally settled, February gold lost $5 an ounce to $554, while March silver slid 17.8 cents an ounce to $8.93. April platinum lost $12.50 to $1,036.20 an ounce after earlier hitting a high for the day of $1,056. March palladium managed a 5-cent gain to $277.70 but settled well down from its $286.50 high for the day."

"One trader of platinum and palladium expressed surprise at the extent of the
sell-off in all of the precious metals since. Oil is up. And usually when oil is up, gold will follow and pull the other metals up with it,' he said. 'But for some reason, gold bucked the trend today and pulled down platinum and palladium with it. It's just a crazy day.'"

"The move by Iran to transfer its assets is to preempt a potential asset freeze by the United Nations Security Council after Iran refused to relent to Western pressure to curb a nuclear program. I don't think it is possible for Iran to take money out of both the United States and Europe,' said Michael Woolfolk, senior currency strategist with Bank of New York. 'There are just not sufficiently deep or liquid markets to place these sums of money,' he added."

"A complete overhaul of Iran's reserve portfolio is highly unlikely but some of the funds could be redirected to other assets, analysts said. 'Would it surprise me that they would change their whole asset allocation dramatically? That would be more surprising,' said Alan Ruskin, chief international strategist with RBS Greenwich Capital in Greenwich, Connecticut. 'They could change some of it to something more country-neutral, like gold,' he added."