Tuesday, April 17, 2007


Gold Traders "Cash In Chips"

FX Street reports on currencies. "The U.S. dollar weakened to a new 2-year low versus the euro this morning after a report showed core U.S. consumer prices rose by less than expected in March, supporting a view that U.S. interest rates may be set to move lower."

"The British pound rallied to $2 overnight, touching levels not seen for almost 15 years as news of accelerating British inflation last month stoked expectations of a further rise in borrowing costs from the Bank of England. Data showing a 3.1 percent annual jump in British consumer price inflation in March, the highest since comparable records began in 1997, served as the impetus for the pounds appreciation."

"Currency market analysts believe that further pound gains are likely. A move above $2.01 would herald the highest level in over quarter of a century."

"The Japanese yen continued to weaken across the board, primarily as a result of weak Japanese fundamentals and a continuation of the carry trade phenomena. The yen hit a record low versus the euro yesteray after a weekend meeting of Group of Seven finance officials expressed no concerns about the Japanese currency's weakness, prompting traders to load up on carry trades."

"The Chinese yuan closed slightly higher against the dollar overnight, stabilizing after its third-biggest one-day fall of the year on Monday as dollar supplies in the market felt a temporary pinch. Monday's fall came after the People's Bank of China set the yuan's daily mid-point at a post-revaluation high of 7.7220, indicating the market was at odds with the central bank's apparent willingness to let the yuan rise toward 7.7200."

From MarketWatch. "Gold futures took second billing Tuesday, easing back after Monday's climb. June gold fell $2 to close at $692.50 an ounce on Nymex. 'Some participants cashed in their chips,' explained Jon Nadler, analyst at Kitco Bullion Dealers."

"'Some traders feel that there may be more consolidation ahead before gold prices manage to break the psychologically important $700 mark,' Action Economics said in a research note."

"James Moore, metals analyst at TheBullionDesk.com, said gold 'appears to be catching its breath.' However, 'momentum is still firmly to the upside with further diversification away from the dollar looking set to propel gold through $700 and on to challenge the $732 high we saw last May,' Moore said."

"Most other metals prices moved lower along with gold, though June palladium rose $1.35 to close at $380.35 an ounce. May silver fell 6 cents to end at $14.02 an ounce and July platinum fell $8.60 to close at $1,280.90 an ounce."

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