The headlines this morning that 25 of the 27 countries in the EU have agreed on a deal to reduce Greek debt, caused a rally in the EUR/USD and renewed optimism in the commodities sector. Platinum, silver and gold all made new highs on their run up from the December 2011 lows. Copper and oil also rallied to break through recent highs, however all have retraced some of their intraday gains, including the EUR. The elation in the markets over the debt deals that helped the European indices close higher has since waned, hence the selloff in the commodities and EURUSD cross. One major concern is that Greece and Portuguese credit is still extremely tight and very costly. A Greek debt deal that contains a haircut may trigger a chain reaction. There is a possibility that contagion on the back of this deal will spread from Greece to Portugal and even to Ireland. Should this occur the credit for these nations will become incredibly tight and a full default may be the only option.
The precious metals complex is benefiting greatly from the confusion in the EU and the global economy as a whole. Gold and silver have been obvious benefactors of the recent shift in perception back to the commodities as inflation hedge trade. We are currently trading lower on the day in both gold and silver as we are seeing a bit of profit taking. In the near term we may see the metal pull back and consolidate, but the long term outlook remains very positive. Eventually it seems we will see further quantitative easing in the EU or US, which in the end is very bullish for the metals.
Metals | Last | %Change | Low | High |
Au- Apr | 1731.1 | -0.19% | 1727 | 1750.6 |
Pt-Apr | 1596.1 | -1.21% | 1594.0 | 1633 |
Pd-Mar | 685 | -0.51% | 684.15 | 696.95 |
Ag-Mar | 32.990 | -1.60% | 32.930 | 34.130 |
London | AM | PM | Minor | PGMs |
Au | 1738 | 1744 | Rh | 1475 |
Pt | 1613 | 1608 | Ru | 120 |
Pd | 685 | 684 | Ir | 1100 |
Ag | 33.6 | DJI | 12583.98 | -69.74 |
Currencies |
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|
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| USD | EUR | JPY | GBP |
USD | 0 | 1.3055 | 0.013102 | 1.5752 |
EUR | 0.7659 | 0 | 1.00359 | 1.2066 |
JPY | 76.32 | 99.64 | 0 | 120.223 |
GBP | 0.6348 | 0.82876 | 0.8318 | 0 |
*THESE PRICES ARE FOR INDICATION ONLY CALL FOR QUOTES | ||||
