Gold And Silver Rebound On Renewed Bout Of Fear Trade Sentiments
Commodity Trade Mantra | Jan 31, 2013 06:47AM ET
The major Gold and Silver Price booster was a surprisingly weak U.S. economic report. This came as a shock to the Eurozone underpinned Gold Prices, and expectations that demand will pick up for industrial commodities supported oil and copper prices. European markets are likely to extend losses, with financial spread betters predicting London’s FTSE 100,Paris’s CAC-40 and Frankfurt’s DAX would open down as much as 0.3%. A 0.1% drop in U.S. stock futures suggested a soft open at Wall Street. After recent gains that took several stock markets to multi-month highs, investors appeared to adopt a cautious stance ahead of key data such as China’s official manufacturing PMI and U.S. monthly Non farm payrolls on Friday.
The Euro held near a 14-month peak against the dollar and a 2-1/2 year high versus the yen on Thursday, supported by expectations for central banks in the United States and Japan to keep an aggressive easing stance. With the euro having breached key resistance at $1.35, analysts say its rally may have more room to run. “Euro/dollar we now think will rise to $1.37. The euro crosses are also likely to benefit from the return of exiled capital that left the Eurozone,” said Gareth Berry, G10 FX strategist for UBS in Singapore. A rise toward $1.37 or $1.38 can’t be ruled out on the back of the current trend, but I don’t think you should view a move like that as one that is based on a positive view of (economic) fundamentals. Against the yen, the single currency held steady at 123.53 yen, near a peak of 123.87 yen set on Wednesday, which marked the Euro’s highest level against the Japanese currency since May 2010.
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