Yesterday turned into a disaster for equities, crude oil and base metals. However, precious metals showed their mettle. With financial markets in such disarray, gold was the happy beneficiary.
After an uninspired start by equities in Asia yesterday morning, markets deteriorated as the day progressed. The FTSE in London shed 7.85%, followed by the S&P and Dow clocking losses of 3.85% and 3.58% respectively. Equities in Asia are listless again this morning in the wake of yesterday's shocking stock performances in Europe and the US after markets in Asia had closed. However, today should be less volatile trading as financial market investors regroup.
With panic spreading yesterday, the US dollar simply shone. It went from strength to strength, pushing from $1.3705 in Hong Kong to $1.3444 against the euro in New York. Should sentiment steady today, the dollar might give up some of these gains. However, we believe the euro will remain under pressure against the greenback in coming months.
Central bankers around the world, specifically European central bankers, are likely to work ceaselessly to return stability to financial markets. While a surprise interest rate cut is not our base-case scenario, we believe the odds of this have risen in Europe and the US. ECB president, Mr Trichet, will speak later today, followed by Fed Chair Bernanke. Markets will be scrutinizing their comments.
Gold started the day steadily, drifting around $830. But with panic infecting equity markets, investors piled into the yellow metal when European markets opened. Gold then climbed to $875.5 at the PM Fix. What makes this rally so noteworthy is that it happened despite a rampant US dollar. Towards the close in New York, gold had to surrender some gains; it closed at $864. Primary support is at $853, and secondary support at $843 and $822. Resistance is at $875, $888, and $906.
Silver started the day on the back foot, losing 30 cents in Asia, to trade at $11.00. But with gold pushing higher in Europe, silver followed, touching $11.50. In choppy trade, it bounced between $11.15 and $11.40. Support fell away towards the close, and silver closed at $11.04. Primary support is at $10.94 and secondary support at $10.64 - $10.50. Primary resistance is at $11.52, and secondary at $11.80.
Platinum also benefited from financial market uncertainty, tracking gold. It gained from $930 to just around $1,000 in New York. With momentum fading for gold, platinum closed at $973.
Palladium is still holding up well. Although trade has been erratic, it seems to have settled at $195 - $205. It closed at $198.
Rhodium dropped again, fixing at $3,195 in New York.
After an uninspired start by equities in Asia yesterday morning, markets deteriorated as the day progressed. The FTSE in London shed 7.85%, followed by the S&P and Dow clocking losses of 3.85% and 3.58% respectively. Equities in Asia are listless again this morning in the wake of yesterday's shocking stock performances in Europe and the US after markets in Asia had closed. However, today should be less volatile trading as financial market investors regroup.
With panic spreading yesterday, the US dollar simply shone. It went from strength to strength, pushing from $1.3705 in Hong Kong to $1.3444 against the euro in New York. Should sentiment steady today, the dollar might give up some of these gains. However, we believe the euro will remain under pressure against the greenback in coming months.
Central bankers around the world, specifically European central bankers, are likely to work ceaselessly to return stability to financial markets. While a surprise interest rate cut is not our base-case scenario, we believe the odds of this have risen in Europe and the US. ECB president, Mr Trichet, will speak later today, followed by Fed Chair Bernanke. Markets will be scrutinizing their comments.
Gold started the day steadily, drifting around $830. But with panic infecting equity markets, investors piled into the yellow metal when European markets opened. Gold then climbed to $875.5 at the PM Fix. What makes this rally so noteworthy is that it happened despite a rampant US dollar. Towards the close in New York, gold had to surrender some gains; it closed at $864. Primary support is at $853, and secondary support at $843 and $822. Resistance is at $875, $888, and $906.
Silver started the day on the back foot, losing 30 cents in Asia, to trade at $11.00. But with gold pushing higher in Europe, silver followed, touching $11.50. In choppy trade, it bounced between $11.15 and $11.40. Support fell away towards the close, and silver closed at $11.04. Primary support is at $10.94 and secondary support at $10.64 - $10.50. Primary resistance is at $11.52, and secondary at $11.80.
Platinum also benefited from financial market uncertainty, tracking gold. It gained from $930 to just around $1,000 in New York. With momentum fading for gold, platinum closed at $973.
Palladium is still holding up well. Although trade has been erratic, it seems to have settled at $195 - $205. It closed at $198.
Rhodium dropped again, fixing at $3,195 in New York.
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1 comment:
Thanks for writing this.
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