Thursday, March 08, 2007


"Sentiment Has Improved" For Precious Metals

Bloomberg reports on currencies. "The Australian dollar is headed for its second weekly decline against the U.S. currency and yen after a slump in equity markets prompted investors to sell riskier assets paid for by borrowing in Japan. The local dollar declined against 13 of 14 currencies in the Asia-Pacific this week after Asian stocks had their biggest fall in almost nine months March 5."

"'Most of the fall happened early in the week when we had more equity market upheaval,' said Greg Gibbs, currency strategist at ABN Amro Australia Ltd. in Sydney. 'The Australian dollar is definitely trading on the back of risk aversion and that's the reason it's lower this week.'"

"The Australian dollar bought 77.68 U.S. cents at 8:28 a.m. in Sydney compared with 77.78 cents late in Asia yesterday and 78.22 cents in New York a week ago. It could trade as low as 77.50 cents today, Gibbs said. The currency was at 90.97 yen, unchanged from late in Asia yesterday and down from 91.38 yen a week ago."

From MarketWatch. "Gold futures climbed for a third-straight session to end Thursday at their strongest level in a week. Still, a rise in the U.S. dollar put a cap on the metal's gains."

"The US dollar rose against major counterparts, putting some pressure on April gold, which touched a low of $652 during Thursday's trading session. The euro fell against the dollar after the European Central Bank raised its key interest rate by a quarter-percentage point to 3.75%."

"The yen tumbled against the dollar and other higher-yielding currencies amid market talk of renewed interest in carry trades, or the practice of borrowing or selling low-yielding currencies, such as the yen and the Swiss franc, and reinvesting in higher-return currencies and assets."

"Gold for April delivery closed up $2.60 at $655.50 an ounce on the New York Mercantile Exchange, the contract's highest level in a week. It's now gained $16.30 during a three-session climb, which followed a five-session losing streak that drew down prices by more than $50."

"'We received our expected bounce/reversal and that was the easy short-term call,' said Peter Spina, chief investment strategist at 'Now we will watch in the coming sessions if these gains can extend.'"

"He said he believes 'this momentum will continue to take us back to the upper $600s.' But for now, 'a move past $655 is the first step before moving back up to the $675 resistance area.'"

"'There will be difficulty short-term if we find this reversal take a breather, and a period of consolidation may be needed before we can expect the next leg higher in gold to begin,' he said."

"'Sentiment has improved dramatically across the metals spectrum in the past 24 hours through a combination of fundamentals and external factors such as the dollar and oil,' said James Moore, an analyst at"

"It still remains to be seen whether the recovery is sustainable; however, if prices manage to stabilize above $656, the market might rise sharply, boosted by funds building fresh long positions, Moore said."

"'Overall, the next few days are likely to be nervous as the [metals] market digests why the recent sell-off rippled through so many markets and what it was telling us,' said William Adams, an analyst at"

From Reuters. "Oil fell below $62 a barrel on Thursday, pressured by comfortable crude supplies in the United States, the world's top energy consumer. U.S. crude settled 18 cents lower at $61.64 a barrel, while London Brent crude was down 17 cents at $62.33."

"'Energy's fundamentals are uncertain at best,' wrote Edward Meir of Man Energy. 'Stock levels are comfortable despite the recent draws.'"

"U.S. and Brent crude rose by well over a dollar on Wednesday after the United States said crude stocks fell by 4.8 million barrels last week, against forecasts for a rise."

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