Gold Spreads Rebound After Falling on Greek Referendum News
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The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 2 November 2011
After the selling of yesterday, the FTSE is a little higher this morning taking us back to the mid 5400 area.
At the time of writing it is bang on 5450 and this 5400 area is where the index found it so hard to break through to the upside throughout August and September.
The theory goes that past resistance becomes future support and so buyers are being attracted back, tentatively expecting 5400 to hold firm. Having said that, I suspect many will be keeping a close guaranteed stop loss below this level in case more crashing ensues.
The euro, which suffered substantial losses in the last couple of sessions, is also turning higher in line with European equity markets.
An emergency meeting between European leaders is getting underway today ahead of tomorrow and Friday’s G20 photograph opportunity.
The markets are hoping to hear the announcement of a referendum date sooner rather than later and hopefully to be held next month.
EUR/USD is at $1.3775 at the time of writing having found support around $1.3630 and the bulls will be targeting $1.3860.
Just as investors were starting to see the silver lining around the cloud, turmoil hit the financial spread betting markets.
Initially, the gold spread betting market felt the brunt of the disarray, dropping to as low as $1680.9, but pessimists could not keep it under the $1700.0 mark for long. Bargain hunters stepped in to snap up a deal and traders chose it as a traditional hedge against market mayhem.
By the end of the day, the losses had been wiped off and $5 was added onto the starting price, taking it up to $1719.3. This morning the precious metal is seeing further strength to $1735.
Risk adverse traders threw their money in to safety havens, the main one being the US dollar.
This, in turn, pushed crude oil prices down and a drop in China’s PMI manufacturing, the second largest oil consumer, helped put further pressure on the black gold.
A late pull back was seen though as better prospects for the US economy were reported, with new orders expected to rise. At time of writing, the black stuff is sitting at $110.31.
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.
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'Gold Spreads Rebound After Falling on Greek Referendum News' edited by SD, updated 02-Nov-11
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