Tuesday, July 17, 2007


Sterling Pushes To 26 Year High

Reuters reports on currencies. "The dollar edged up against the yen on Tuesday after a government report showed foreign investors bought a record amount of U.S. securities in May. A slightly larger-than-expected advance in producer prices last month also provided mild support for the greenback, which helped to ease some concerns that the Federal Reserve will soon have to cut interest rates."

"However, the dollar failed to get much traction against the euro or sterling. The latter pushed further above $2.04, a 26-year high, after UK inflation data reinforced expectations of another rate hike from the Bank of England."

"Midafternoon, the dollar was up 0.4 percent at 122.33 yen, while the euro was up 0.1 percent at $1.3780, not far from a lifetime high of $1.3813 hit last week."

From MarketWatch. "Gold futures closed slightly lower Tuesday to tally a three-session loss of more than $2 an ounce as the U.S. dollar traded on a mixed note and crude price backed off a high of more than $75 a barrel."

"'Minor price fatigue was visible in the market as bullion prices turned under the critical $665 mark on Tuesday,' said Jon Nadler, analyst at Kitco Bullion Dealers."

"Gold for August delivery fell 40 cents to close at $665.90 an ounce on the New York Mercantile Exchange. The contract fell $1 Monday, pulling back after reaching a high of $669.50 during the regular session. It's lost $2.40 since Thursday's close of $668.30."

"'Despite an onslaught of increased bearishness and some highly suspect capping trading patterns on the Comex, gold has managed to more than hold its own during its weakest seasonally favorable period,' said Peter Grandich, editor of the Grandich Letter. 'The big surprise in coming days could be a major break above key resistance in the $670 to $675 area,' Grandich said.'

"On the currency markets, the British pound rallied to a new 26-year peak against the dollar. The greenback edged higher against the yen, but remained lower against major European currencies."

"'The divergence between gold and the valuation of the dollar is reaching an extreme level that cannot be sustained,' said Ned Schmidt, editor of the Value View Gold Report. 'What that means is that the value of major currencies has appreciated, sending the dollar to a new low.'"

"But 'gold, which is really just a money, has not reflected that valuation,' he said in e-mailed comments. He said a 'major upward revaluation of gold is extremely likely.'"

"Aside from the dollar, 'the near-record oil prices and the increasing inflationary pressures which they are creating internationally,' are just as important Mark O'Byrne, director at Gold & Silver Investments Ltd. said."

"Elsewhere in metals trading Tuesday, metals prices closed broadly lower, with September silver losing 4.7 cents to close at $13.018 an ounce. September palladium fell $2.45 to finish at $367.75 an ounce and October platinum fell $4.50 to close at $1,322.60 an ounce."

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