Commodity Spread Betting: Gold Rises on European Investor Optimism
|
|
 |
The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 6 October 2011
Despite the doom and gloom surrounding the economy, the markets are in recovery mode at the moment and seem to be wishing on a prayer that European leaders are going to find the answer in the coming weeks.
The doom and gloom is so bad that even the UK’s biggest retailer is feeling the pinch. Heavy discounting by Tesco in order to get customers has squeezed their margins significantly and more and more shoppers are trading down to value brands.
Food is usually one of the areas where people can stomach, excuse the pun, the odd price rise, but it’s unsurprising to see that even this part of people’s everyday need is seeing a squeeze.
With prices going up everywhere, the drop in inflation that the Bank of England predicted has so far failed to materialise and so consumers are really feeling it where it hurts.
Yesterday’s GDP number, which was revised downwards, showed a shock drop in consumer spending and unfortunately the outlook isn’t all that bright either.
Everywhere is slowing down, from Europe to the US and onto China, and it’s the lack of confidence that’s causing such a drag on growth.
Equity spread betting markets on the other hand are trying to pre-empt a possible recovery by rallying from their lows.
Markets are always forward looking and many investors see plenty of bargain stocks out there. Not only this, but they are possibly looking at the buy of the century if Europe’s problems are taken out of the equation.
Noises out of Europe seem to have a greater sense of urgency now. There has been a realisation that a really big deal needs to be done in order to save the banking sector from potential disaster if, although the majority are now saying ‘when’, there’s a sovereign default.
The FTSE is at 5160 at the time of writing. Who’d have thought on Monday or even Tuesday that we’d be back at this level so quickly. The buyers are still there and once again support around 5000 has kept the FTSE afloat.
Today is all about central bank decisions and yesterday FX spread betting investors were tentative in anticipation of the ECB meeting on interest rates.
There is some speculation is that European rates could be cut, which could signal weakness and further misery for the Euro, however no action is actually expected from either the BoE or the ECB.
If neither make their move today, then the likelihood of a fresh round of printing from the BoE and an interest rate cut by the ECB is far greater next month.
The EUR/USD pair is currently trading at $1.3339 and has broken through a rising trend line, which is a negative signal.
We could expect to see possible weakness here although, fundamentally, the news coming from the ECB meeting later is likely to have some sort of effect as well.
The Yen and Dollar remain the preferred choice of safe haven for traders at the moment and there is no reason for this to change anytime soon.
With the commodity markets bouncing back and equity markets showing a good recovery, investors were keen to help push gold higher as the feel good factor took over the markets.
The level of $1600.0 looks like it’s in place to provide a good support for the yellow brick and the few attempts to break below this were brushed off.
In the end, the precious metal rallied $16 to $1641.4, but still looks set for a period of consolidation within the $1600.0 - $1675.0 range. At time of writing, the gold spread trading market is sitting at $1646.3.
The unexpected decline in crude oil inventories yesterday set the path for a rise in the black stuff’s price.
The fact it came in on the back of a drop in crude imports was of little importance to the bulls as the data was accompanied by the surprisingly better than expected initial jobless claim figure.
To generously add to the rally was the rebound in equities, providing solid direction for the energy complex.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.
'Commodity Spread Betting: Gold Rises on European Investor Optimism' edited by SD, updated 06-Oct-11
Related Articles:
Financial Markets, updated 21-May-12
Financial Markets - your daily update on the markets with views and opinions from the insiders, plus a look at...read article: Financial Markets.
Online Spread Trading, updated 14-May-12
A look at the latest spread betting markets plus company reviews, compare prices and details on where to free charts and free live prices....read article: Online Spread Trading.
Euro / Dollar Spreads Drop on Eurozone Sovereign Debt Concerns, updated 02-May-12
Europe remains engulfed in sovereign debt troubles so the forex markets took notice of the potential downside over the short term. This morning the euro is...read article: Euro / Dollar Spreads Drop on Eurozone Sovereign Debt Concerns.
Commodities Spread Betting: Gold Futures Rebound After Sharp Losses, updated 01-May-12
The commodities markets saw a sharp sell off in gold yesterday. For the rest of the day, the gold futures market fought its way back up and closed...read article: Commodities Spread Betting: Gold Futures Rebound After Sharp Losses.
Online Spread Betting Markets See Gains Despite Weak US GDP Figures, updated 30-Apr-12
The online spread betting markets seem to be defying gravity as they brushed off Friday's weaker than expected US GDP figures. Stock market indices...read article: Online Spread Betting Markets See Gains Despite Weak US GDP Figures.
US Crude Oil Futures Struggle as US Jobless Data Disappoints, updated 27-Apr-12
The US crude oil futures market started under pressure as the figures for the US jobless claims continued to show a struggling employment sector. However...read article: US Crude Oil Futures Struggle as US Jobless Data Disappoints.
Forex Spread Trading: Euro Falls as Hollande Vows Treaty Renegotiation, updated 26-Apr-12
Francois Hollande, leading French Presidential candidate, vowed to renegotiate the European treaty. The forex spread trading markets saw the euro remain at...read article: Forex Spread Trading: Euro Falls as Hollande Vows Treaty Renegotiation.
First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page
Daily Spread Trading Index
Index of spread trading articles - the regular Spread Trading Update from Financial Spreads...see Index.
|
|
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
|
|
