Spread Betting 20 May 2013
European stocks are set to open marginally lower this morning, despite strong gains being seen across Asia.
Life is getting harder for market commentators as there are only a finite number of ways of writing the same piece of news.
In case you weren't aware of the continuing theme in 2013, the US saw some improving data, more companies released better-than-expected earnings, and we are at yet more all-time highs.
The problem is that as long as economic data continues to improve and stimulus measures are kept in tact, nothing is likely to change unless investors get nervous.
This time around it was US consumer confidence and future economic activity sentiment that gave online spread trading markets the boost, both of which are at five year highs.
Until something changes, it seems that most of the signs are pointing in one direction.
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Gold closed at $1,354.6 in the last session and is down by around 13% for the first quarter due to a large sell-off in exchange traded products.
This has outweighed demand from bargain hunters in Asia and China that have been locked in a tug-of-war battle with the bears.
This morning, the metal is heading south for an eighth straight session, to its weakest level in a month, on fears that the Fed will reduce their monetary stimulus measures.
This would dent gold's appeal as a hedge against inflation which such easing measures have been known to stoke.
With equity markets hitting record highs, the temptation for investors to be a part of the wave has caused them to dump gold in favour of riskier opportunities.
Having said that, many would argue that buying into the gold market at this point could be riskier still.
Brent crude for June delivery closed at $104.56 in the last session and was approaching the $105 mark earlier this morning on upbeat economic data and as equity markets continue to impress.
Asian shares are on the up after encouragement from US equities, with sentiment in the world's largest economy hitting a six-year high.
Despite this morning's moves, prices have been weighed on by this year's projected weaker demand as well as increasing stockpiles.
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'Financial Markets' edited by Simon Denham, updated 20-May-13
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