Gold Overview
The surprisingly bigger than expected trade deficit for China hit gold prices yesterday, snapping a stream of three positive sessions as demand for precious metals also came under questioning. The Asian country is one of the top buyers of gold jewellery along India so a slowdown in its economic growth is bound to have a negative effect on gold prices. Overall, the yellow metal fell $13.70 to $1700.00 but its short term outlook remains momentarily one of consolidation.
Overview
A much wider than initially anticipated trade deficit for China, the world’s second oil consumer has spilled over into energy complex sending crude prices down. The Chinese government said the deficit of $31.48 billion for last month was a result of lower exports demand combined with seasonal downward adjustments and followed an over $27.00 billion surplus for January. In addition, sovereign debt troubles in Europe are far from being solved despite reassurances from Brussels that Greece will gets its bailout funds.
EUR/USD Overview
The leader of the euro finance ministers, Jean Claude Juncker reassured the markets yesterday by saying ‘there is no doubt’ that Greece will get the approval for its bailout funds later in the week. Consequently, the single currency enjoyed a slight rebound after Friday’s sharp sell off, gaining 26 pips to $1.3147. After rallying to nearly $1.35 from the beginning of the year, the euro is now ranging within $1.3100 – $1.3300 as the short term bias seems to turn sideways.
Gold Overview
With no mentioning of a possible third round of asset purchasing in Federal Reserve Chairman Ben Bernanke’s speech last week, gold sold off sharply as demand for an alternative asset eased. Instead, encouraged by a US economy on the mend investors rushed into the greenback again delivering further blows to the yellow metal. On Friday, gold lost $5.85 to $1712.25 ending the week on its knees after the significant nosedive seen Wednesday. The short term outlook has now turned to the downside.
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