Monday, August 21, 2006


'The Summer Of Unrest Continues'

Some reports on currency markets. "Against the U.S. dollar, the European currency extended last week's gains Monday in New York. The Euro gained momentum against the greenback during the overnight period, pushing up into the early morning hours. The pair continued to show steady advances throughout much of the morning period, fetching an 11-week high of about 1.2936. Soon after, the European currency edged lower against its U.S. counterpart."

"Earlier, remarks by Bundesbank President Axel Weber, predicting substantial economic growth in the Euro-zone for the remainder of 2006, increased speculation that the ECB may raise rates in September. Also, Euro-zone trade balance data reported higher-than-expected, rising 2.0%."

"The Canadian dollar rose the most in two weeks as gains in commodities including crude oil and gold boosted the currency's appeal. Canada's dollar has climbed 4 percent this year, benefiting from rising prices of its commodity exports."

"'Oil above $70 always provides a psychological support to investors, and that's what we're seeing today,' said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto."

"Crude oil rose a second day after Iran resisted a United Nations demand to stop enriching uranium, heightening concern oil supplies from the world's fourth-largest producer will be disrupted. Crude for September delivery rose as much as 94 cents, or 1.3 percent, to $72.08 a barrel."

From MarketWatch. "Gold futures surged nearly $14 an ounce Monday to close at their loftiest level in three sessions as oil prices gained on signs that Iran is poised to reject a United Nations demand that it cease enriching uranium for its nuclear program. 'The summer of unrest continues to unfold and keep volatility on the boil, just as we get closer to the time of seasonal strength in gold prices,' said Jon Nadler, an investment products analyst."

"Gold for December delivery closed up $13.50, or 2.2%, at $635.20 an ounce on the New York Mercantile Exchange, recouping more than half of the nearly $23 loss recorded last week as easing Middle East tensions and inflation concerns undercut demand for the metal as a safe-haven investment and inflation hedge."

"Demand from physical buyers, largely absent from the action last week, added support for the higher prices, according to Nadler. 'Although the repair process remains tentative and the market could still reverse course if prices are deemed either too lofty or simply unsustainable, the stabilization is welcome after several turbulent weeks,' he said."

"Peter Grandich said technically, gold is set up for a run to new yearly highs above $735 an ounce before the end of 2006, after establishing a bottom above the psychologically key $600 level."

"September silver futures tacked on 31.5 cents to close at $12.345 an ounce after touching a high of $12.45, a level it hasn't seen in more than a week. October platinum added $18.50 to end at $1,242.10 an ounce, while September palladium closed up $10.90 at $345.20 an ounce."

IMO, when gold is being moved by geo-politics, it is volatile. Grandich was wishing for a big fall in gold, in order to set up the technical position for a further advance. Looks like he got that last week. His floor just above $600 is as good as anyones.
Zimbabwi just instituted a new currency today...Even this will be
short lived if they dont have honest government...I used to think we had honest government.
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