Gold

Another bad hair day

Yet another bad hair day for risk assets yesterday amidst continuing concerns over a myriad of issues, including the unstable political situation in Greece and ongoing question marks around whether it will remain in the eurozone, the dire state of Spanish banking and sovereign finances, and a sense that the losses registered by the CIO unit at JPMorgan could turn out to be much greater than already disclosed. Read more

15/05/2012 @ 07:12 GMT

A sea of red

Unfortunately, in financial markets at least, it is rarely the merry month of May. Last week was another sea of red, with equity markets on the slide, high-beta currencies heading south and core G4 bond yields declining. Spanish equities were singled out for the harshest treatment, falling another 3%, with the financials again hard hit. The Aussie is back at parity, the euro is under 1.29, and cable is near 1.6050. German 10yr bund yields fell below 1.5%, at the same time as the 10yr yield in Spain rose above 6.0%. Read more

14/05/2012 @ 07:13 GMT

Gold nearly flat

The price action on gold continues to catch the attention. The sustained move below the USD 1,600 level means that it’s now only just in positive territory for the year to date, with this likely to be the worst weekly performance of 2012. Furthermore, year to date performance has been the weakest for seven years. As we pointed out earlier this week (see The golden question), a fair bit of this weakness in gold can be put down to the firmer tone we are seeing to the dollar. But that’s not the whole story, with gold also still weaker in most other currencies over the past week. Read more

11/05/2012 @ 09:28 GMT

Reality bites

The euro’s break below the 1.30 level has been sustained overnight and it’s notable that the dollar has risen in all but two of the past nine sessions, looking at the dollar index chart. The political events in Europe, both in France and Greece, have served to enhance the more risk-averse trend that was already in place last week. Furthermore, in Europe we are seeing fresh signs of stress in the banking sector, such as widenings in cross-currency basis swaps and also Libor-OIS spreads. Read more

10/05/2012 @ 07:42 GMT

The golden question

Yesterday was a pretty key day in the gold market. Spot fell over 2% and, as well as moving below the USD 1,600 level, it also fell through key trendline support just above that level, drawn from the late 2008 lows. Technically, this puts the gold bulls in a more difficult position, arguing that what we are seeing is just a temporary pull-back from a longer-term uptrend. As always, some of this recent activity can be put down to the movements in the dollar, with the dollar index rising against the backdrop of greater political uncertainty within Europe. Read more

09/05/2012 @ 10:20 GMT

Gold’s limited allure

April proved to be a fairly poor month for many asset classes, especially risk assets. Gold proved to be no exception, with April the third consecutive down month. You have to go back over ten years or so to see a similar period of down months, although not in percentage terms. Gold is still only 5% lower over this period. Nevertheless, the subdued price action, after the fall at the end of end February, has been fairly lackluster. Read more

02/05/2012 @ 14:08 GMT

RBA boldness should be applauded

Last night’s decision by the RBA to lower the cash rate by 50bp to 3.75% ought to be applauded. Faced with an economy which, outside the mining sector, is in recession and with inflation likely to be lower than expected, policy-makers rightly decided that financial conditions needed to be loosened considerably. Australia’s central bank would also be concerned by the continued decline in property prices – according to the ABS, established house prices fell by a further 1.1% in the first quarter, the fifth consecutive quarterly decline. Read more

01/05/2012 @ 07:37 GMT

A critical time for gold

The next couple of weeks loom as a critical time for the gold price following sustained selling pressure since the end of February. Over that time, the precious metal has fallen by USD 160 to USD 1,625, although, for the year to date, it is still up by 4%. Should the gold price take out last December’s low at USD 1,522.65, then from a technical perspective this would be a very bearish signal indeed.

05/04/12 @ 08:51 GMT by Michael Derks, Chief Strategist

Germany moving the right way

It now looks more than likely that Germany will recommend an increase in the firepower of the eurozone’s rescue facilities at Friday’s meeting of finance ministers. Initially, Germany steadfastly refused to sanction such a move, among other things fearing that it would make peripheral countries less likely to implement austerity measures with such a safety net in place. In reality though, with yields rising in peripheral nations, especially in Spain, then there can be little doubt that this is the correct course of action. Read more

26/03/2012 @ 07:24 GMT

Gold is struggling

After ten consecutive years of gains, gold is definitely struggling. Read more

23/03/2012 @ 11:55 GMT

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