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Posts tagged “United States Department of the Treasury

Crude Oil Set to Fall with S&P 500, Gold Gains on Safe-Haven Demand


By Ilya Spivak, Currency Strategist

08 August 2011 11:01 GMT

Talking Points

  • Crude Oil Sinks, Following S&P 500 Amid Risk Aversion
  • Gold Proves Above $1700 Figure on Safe-Haven Demand

WTI Crude Oil (NY Close): $86.88 // +0.25 // +0.29%

Crude is firmly anchored to overall risk appetite trends, with the correlation between the WTI contract and the S&P 500 at the highest in nine months (0.78). Needless to say, this points the way lower as futures tracking the benchmark stock index trade down over 2.5 percent ahead of the opening bell on Wall Street. The selloff reflects traders’ interpretation of the Standard and Poor’s downgrade of the US credit rating in terms of its implications for the altering faltering global recovery, worrying it bring higher borrowing costs and amount to yet another headwind for the world’s top economy.

Prices broke below support at the bottom of a long-term rising channel set from the March 2009 low set in the aftermath of the 2008 financial crisis. As with the S&P 500, a bounce to relieve increasingly oversold conditions seems reasonable in the near term. Near-term Fibonacci resistance lines up at $90.88. Alternatively, a sustained break through current support at $85.25 exposes $78.29.

Crude_Oil_Set_to_Fall_with_SP_500_Gold_Gains_on_Safe-Haven_Demand_body_Picture_3.png, Crude Oil Set to Fall with S&P 500, Gold Gains on Safe-Haven Demand

Spot Gold (NY Close): 1663.80 // +17.28 // +1.05%

Gold is understandably pushing higher, boosted by safe-haven demand as global slowdown fears are compounded in the wake of the S&P downgrade of the US credit rating. Indeed, seems particularly attractive when compared to anti-risk paper currency alternatives, facing no official intervention (as with the Franc and Yen) or a looming threat of renewed quantitative easing (as with the US Dollar ahead of Tuesday’s FOMC meeting).

Technical positioning is not quite as rosy however. Prices gapped above major resistance at a rising channel top in place since mid-May 2010, pointing to acceleration in the uptrend and exposing the measured target at $1745.97, but signs of negative RSI divergence warn that bullish momentum is waning and a blow-off top may be in progress. Near-term support stands at $1682.67, the 76.4% Fibonacci extension level.

Crude_Oil_Set_to_Fall_with_SP_500_Gold_Gains_on_Safe-Haven_Demand_body_Picture_4.png, Crude Oil Set to Fall with S&P 500, Gold Gains on Safe-Haven Demand

Spot Silver (NY Close): $38.35 // -0.56 // -1.43%

A would-be bullish breakout was quickly overturned, with prices once again testing the rising trend line set from the late-June low. As with gold, safe-haven demand is underpinning the cheaper metal but the correlation between the two metals is on the wane, perhaps alluding to its inferior liquidity parameters. Near-term support stands at $38.88, while resistance lines at $40.17.

Crude_Oil_Set_to_Fall_with_SP_500_Gold_Gains_on_Safe-Haven_Demand_body_Picture_5.png, Crude Oil Set to Fall with S&P 500, Gold Gains on Safe-Haven Demand

 

 


Gold & Silver – Daily Outlook August 8


Guest Commentary: Gold & Silver Daily Outlook 08.08.2011

The level of volatility in the financial markets is very high over the weekend news of Standard and Poor’s downgrading the US credit rating ; ECB signaled yesterday it will purchase Italian and Spanish bonds in an attempt to cool down the markets. Today, the Chinese inflation rate for July will be published.

Let’s examine the precious metals market for today, August 8 th :

Gold fell again on Friday by 0.43% and reached $1,651. Silver sharply declined by 3.09% to $38.21.

During August, gold price increased by 1.3% and silver fell by 4.7%.

The chart below shows the normalized gold and silver (July 12 th 2011=100). As seen below, gold and silver rose very rapidly during the first few days in August, but then they have changed direction and declined in the last couple of days.

Guest_Commentary_Gold_Silver_Daily_Outlook_08.08.2011_body_Gold_prices_forecast__silver_price_outlook_2011_August_8.png, Guest Commentary: Gold & Silver - Daily Outlook 08.08.2011

S&P Downgrade Ramifications

The rumors of Standard and Poor’s downgrading the US credit rating from AAA to +AA eventually came true as S&P announced it over the weekend. The rumors that floated during last week are probably among the reasons for the sharp falls in Major Stock Markets during the second half of last week. This suggests that there will likely to be a negative reaction to the markets. Gold and silver will probably play the safe heaven card and the demand for them will rise resulting in price hikes during the day.

S&P also kept a “negative” outlook on US credit rating, and claimed it may further downgrade it again within the next couple of years.

The US Treasury Department already attacked the S&P decision to downgrade and pointed out to the mistake S&P made in its projected US government debt of $2 trillion over 10 years; this means the US public debt projection is more stabile than S&P had initially calculated.

Italian and Spanish Bond Problems

The debt crisis in Europe continues to spread and recently it came to Italy’s doorstep. Yesterday, the European Central Bank‘s President Jean- Claude Trichet signaled he is willing to purchase Italian and Spanish bonds in an attempt to curb the market instability, after they had failed to sell its bonds. In return, Berlusconi pledged to make drastic cuts to the Italian government budget. The Euro to US dollar already started the market trading on a rise . This news might have curbed some of the gains in gold and silver prices had it not reacted so dramatically to the news of the S&P downgrade.

USD/ Gold & Silver– August Update

The Euro/ USD exchange rate sharply inclined on Friday by 1.34%; the USD also depreciated against other currencies including the YEN. If the USD will continue to depreciate during the day, this might continue to affect the recent rally of gold and silver. During August there has been a strong correlation between bullion prices and Euro/ USD , USD/CAD and USD/YEN. These correlations however should be taken with a grain of salts as they are not significant (due to very few samples).

Guest_Commentary_Gold_Silver_Daily_Outlook_08.08.2011_body_Correlation_Gold__Silver_Prices__major_currencies_Euro_to_US_dollar_August_2011.png, Guest Commentary: Gold & Silver - Daily Outlook 08.08.2011

Gold and Silver Outlook:

Gold and silver started the week with very sharp gains after they had declined in the past couple of business days. The news of the US downgrade will probably push traders from US Treasury bills towards gold and silver; the Federal Reserve meeting tomorrow will also be among the factors that could raise the level of anxiety in the markets that will benefit gold and silver traders; this trend however is likely to dissipate very in the next few days and then gold and silver prices will stabilize and resume their slower upward trend.

For further reading: Gold and silver prices outlook for August 2011

Lior Cohen , M.A. commodities analyst and blogger at Trading NRG.

By: Lior Cohen, Energy Analyst for Trading NRG


Ekonomi Melambat, Emas Kian Berkilau


Selasa, 07 Juni 2011 – 09:53 WIB

Ekonomi Melambat, Emas Kian Berkilau

Emas bergerak naik hari Selasa (07/03), melanjutkan kenaikan hingga ke level tertinggi dalam lebih dari 1 bulan pada sesi sebelumnya. Kekhawatiran stagnasi ekonomi Amerika Serikat (AS) membuat investor memilih emas sebagai investasi alternatif.

Spot emas bertambah $1.11 ke level $1,544.16 per ons setelah naik ke $1,553.30 hari Senin (06/03). Emas masih bertahan di bawah level tertinggi sepanjang masa di sekitar $1,575 (awal Mei).

Spot perak nyaris tidak bergerak pada level 436.82 per ons, di bawah rekor $49.51 per ons yang terjadi bulan April. Para pejabat Feds hari Senin mengatakan bahwa data ekonomi saat ini mengecewakan sehingga otoritas mungkin memperpanjang strategi pelonggaran moneter.

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Tuesday, June 7, 2011 – 9:53 pm

Economy Slows, The Gold Starred

Gold moves up on Tuesday (03/07), continuing to rise up to the highest level in more than 1 month in the previous session. Concerns economic stagnation United States (U.S.) make investors choose gold as an investment alternative.

Spot gold added $ 1.11 to as low as $ 1,544.16 per ounce after rising to $ 1,553.30 on Monday (06/03). Gold still remained below the highest level of all time at around $ 1.575 (early May).

Spot silver was almost not moving at the level of 436.82 per ounce, below the record $ 49.51 per ounce which occurred in April. Feds officials on Monday said that economic data is disappointing that the authority may extend the strategy of monetary easing.

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