Gold, Oil and USD

Update: Gold, Crude, and the "Greenback"

Gold rallied 2% to a new high above 1,820 oz Thursday after US data pointed to a stalled economy, as renewed concern about the health of European banks brought additional safe-haven buying.

Bullion's 4th consecutive daily rise came after news that factory activity in the US Mid-Atlantic region fell and existing home sales dropped too.

Brent Crude Oil fell nearly $4 bbl Thursday as a raft of weak U.S. economic data provided a fresh blow to shaky investor confidence, while US WTI Crude's losses extended to 14% so far in August.

Thursday's declines follow a short-lived rebound that had seen Brent Crude climb by around $9 in the previous 6 sessions.

Brent Crude fell 3.61 to settle at 106.99 bbl, breaking below the 200-Day moving average, a Key technical indicator closely watched by traders.

US Crude Oil settled down 5.20, or nearly 6%, at 82.38 bbl. Selling accelerated after the settlement, with prices dropping down to 81.15 bbl.

Signs of a weakening US economy and concerns over European banks' exposure to EuroZone debt saw investors moving into safety Thursday, prompting investors to place bets on the USD and Japanese Yen.

In early afternoon New York trade, the Euro was down 0.9% at 1.4298.

The Swiss franc is bucking the positive trend among the 'safe haven' currencies, on fears of new steps to curb currency strength by the Swiss National Bank.

While the Greenback was 0.1% higher to 0.7916 franc, the Euro was 0.6% lower to 1.1332 francs.

Both the Euro and USD initially gained on talk of Swiss National Bank intervention in the forwards market, although the SNB declined comment.

Traders said by undertaking franc-selling in the forwards instead of in the spot market, the SNB was seeking to drive the return on holding francs even lower, making it less attractive to potential investors.

The market has taken the USD and GBP to levels that make them under-valued with market positioning also very low on these currencies.

A lack of more drastic measures from Tuesday's Franco-German summit to address the EuroZone debt crisis and worries about a tax on financial transactions affecting the region's banks have kept the Euro under pressure.

A WS-J report overnight saying that the US Federal Reserve is scrutinizing European banks in the United States has also dented risk appetite.

The USD was down 0.1% against the Yen at 76.480, not far from its record low of 76.25 Yen struck in March.

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Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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