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• Gold, Silver and Oil Price Outlook
• Asian Shares Boosted by China PMI, Japan Tankan
• Crude Oil, Gold Prices Vulnerable as EU Summit Rally Fizzles

Commodities rebounded sharply on Friday as new measures announced after the EU summit boosted optimism. The 17-nation leaders proposed to create a single supervisory mechanism with the ECB involved. With such mechanism, the funds could be lent directly to banks for recapitalization without penalizing existing debt holders. Funding will be provided by the EFSF until the ESM becomes available. The bailout fund for the Spanish banking system will be financed through the EFSF for the moment and will later be replaced by the ESM. The Commission agreed to eliminate the seniority status of the ESM for this case. Moreover, EU leaders also proposed to use the existing EFSF/ESM instruments "in a flexible and "efficient manner in order to stabilize markets for Member States". We believe this refers to sovereign debt purchases. It's also stated that the ECB would serve as an agent to EFSF/ESM in conducting market operations.

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