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Gold lower but recovers some ground; trade eyes $1,525/oz
(Reuters) - Gold managed to recover most of the ground it lost in a brutal sell-off earlier on Wednesday even as sentiment and the euro remained fragile as European leaders met to discuss the deepening euro-zone debt crisis.
Gold tested key support levels for a second time in a week as a wave of selling hit commodities, the euro and equities, before bouncing off those lows in New York afternoon trading.
Money had piled into bonds and the dollar, assets considered low risk, on Wednesday ahead of a meeting of European Union leaders later in the day. The leaders are expected to discuss growth-boosting measures and the idea of a joint euro zone bond.
Spot gold prices dropped as low as $1,534.25 an ounce, down over 2 percent, as the euro slumped to its weakest against the dollar in nearly ...
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Euro sinks to 21-month low as Greek exit fears rise
(Reuters) - The euro plunged to a 21-month low against the dollar on Wednesday as investors dumped the currency on growing fears of a Greek euro zone exit and widespread doubts about the outcome of an EU summit later in the day.
EU leaders are expected to discuss growth-boosting measures but are not expected to produce any plan that would restore optimism among investors, especially given Germany's strong opposition to joint euro bonds.
Investors are doubtful that the leaders will come up with any measures to calm fears that have grown since an inconclusive Greek election earlier this month left the country on the path to bankruptcy and a possible exit from the euro zone.
"The whole problem of Greece, of fiscal retrenchment in the euro zone, the lack of growth across the region, and the ...
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Doubts over EU summit send shares, euro lower
(Reuters) - World shares fell and Germany sold two-year bonds paying virtually no interest on Wednesday as investors shunned riskier assets, doubting that any new measures to tackle the euro zone debt crisis would emerge from a European leaders summit.
Concerns the latest EU summit could be a failure sent the euro to a 21-month low, put an end to a rally in European equities, and sent yields on Spanish and Italian bonds higher.
But investors bid strongly at an auction of safe-haven two-year German government bonds resulting in a yield of just 0.07 percent, while the dollar, measured against other major currencies .DXY hit a high not seen since September 2010.
The leaders are expected to discuss boosting growth at their meeting later on Wednesday and the idea of a joint euro zone bond. ...
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Dukascopy Morning Forex Overview : 22/05/2012
Fundamental Analysis
EUR
"Inevitably there is going to be an element of bargain hunting as investors look to top up their holdings on the basis of slightly lower prices"
- Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers
European stocks edged higher on Monday on China’s pledge to boost growth.
USD
"Equity prices have gotten oversold"
- Mark Luschini, chief investment strategist for Janney Montgomery Scott LLC
U.S. equity market edged higher on Monday on China stimulus hopes and after German and French officials said they would cooperate to keep Greece in the monetary union.
GBP
"Obviously, as the euro depreciates, the U.K. gets slightly more expensive"
- Miles Shipside, Rightmove commercial director
U.K. national house prices stagnated in March, announced the ...
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Exclusive: U.S. lets China bypass Wall Street for Treasury orders
(Reuters) - China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.
The relationship means the People's Bank of China buys U.S. debt using a different method than any other central bank in the world.
The other central banks, including the Bank of Japan, which has a large appetite for Treasuries, place orders for U.S. debt with major Wall Street banks designated by the government as primary dealers. Those dealers then bid on their behalf at Treasury auctions.
China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.
...
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Copper rises 1 percent on China stimulus hopes
(Reuters) - Copper rose 1 percent in moderate volume on Monday as demand prospects improved after the Chinese premier called for extra efforts to support growth in the world's top metals consumer.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth," Premier Wen Jiabao said on Sunday.
The supportive comments attracted more interest from copper investors, many of whom had already been buying in the market after prices collapsed last week to their lowest in four months.
"China has already been stimulative this year, and to say that they will be more stimulative or will continue to be stimulative is a positive," said Adrian Day, president at Adrian Day Asset Management, which has $165 million in assets.
" ...
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Safe-Haven Dollar
Forex News and Events:
Friday’s trading session was mostly uneventful with all the focus shifted to Facebook’s IPO. Many markets that had been freefalling these last two weeks caught a breather, with gold, silver, and the EUR gaining 1.12%, 2.57% and 0.63% respectively against the USD. The reversal has been attributed to a weak Philly Fed reading on economic activity in a sign that the world’s reserve currency is riskier than panicked markets are pricing. The weak number raised speculation over a new round of interventions from the part of the Fed in order to boost its economy. WTI however, was not able to profit from this reversal as it dropped to a six-month low before closing at 91.33. A 22-year high in inventory levels for the US could explain the decoupling of oil from the rest of ...
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Copper steadies; Spain threatened by Greece's troubles
Copper prices steadied on Thursday after sliding for four straight days and touching four-month lows, but traders remained wary about the metal's prospects amid fears of more fallout from Europe should Greece exit the euro.
For the first time since Friday, copper futures in London and New York inched toward positive territory as support returned to commodities deemed oversold in the risk flight of the past week.
Still, worries about how Europe -- particularly Spain -- would manage Greece's exit from the euro hung heavily on markets, including copper.
A bond sale by Spain came at a markedly higher cost for the government than before, signaling investors' growing concern about the possibility of a contagion impact should Athens default on its own sovereign debt.
"Copper's still seeing ...
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Oil falls on euro zone worries, weak economic data
Brent crude oil slumped more than 2 percent on Thursday, touching the lowest price since December, as investors avoided risky assets due to mounting fears that turmoil in Greece could spread to other stressed euro zone economies.
U.S. crude was down by less than Brent, which reduced Brent's premium against U.S. crude to below $15, from above $19 the previous session, as owners of the U.S. Seaway pipeline announced just after midday that its reversal was completed as expected.
The initial flow of crude that will head for the main U.S. refining center in Houston was to occur by the weekend, a development aimed at easing the supply glut of U.S. crude at the delivery hub in Cushing, Oklahoma. Easing that glut should narrow the premium that Brent has enjoyed over U.S. crude.
But market focus ...
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