Gold Hits 900 Dollars
|
|
|
For today's update see Spread Bets Daily FX News.
The Daily FX Update from Boris Schlossberg, Director of Currency Research, GFT.
FX Spread Betting 26 Jan 09
Gold Hits $900
Gold spiked to within two dollars of $900/oz in holiday leaden Asian trading as sabre rattling between US and Chinese officials regarding the manipulation of the yuan ratcheted the tension in global capital markets. Last week Treasury Secretary-designate Timothy Geithner stated that China was a currency manipulator sending shock waves through the financial markets as the Obama administration appears to have taken a much more confrontational stance with Chinese authorities than its predecessor.
Over the week-end Su Ning, vice governor of the People's Bank of China, shot back that Mr. Geithner’s remarks were misleading and warned that, ”We should avoid any excuse that might lead to the revitalization of trade protectionism. Because it will do no good to the fight against the crisis, nor will it help the healthy and stable development of the global economy."
Last week our colleague Kathy Lien noted that Mr. Geithner made a rookie mistake, writing, “To force China to appreciate its currency means less demand for US Treasuries and US dollars and unfortunately that is not something the US can afford right now when the government needs to spend its way out of recession.”
This escalation in tension between the two giant economies has translated into a strong rally in gold as traders now fear that the safe haven status of the dollar may be compromised by China’s unwillingness to provide further financing for US deficit spending and may result in a sharp spike in inflation as US tries to monetize its debt. The EUR / USD has been the primary beneficiary of the this shift in sentiment rising more than 100 points off the session lows, but should the rally in gold continue the Aussie could see appreciation as well, rekindling the currency’s strong correlation with the price of gold.
Also see:
Advert:
GFT Spread Betting - No Fees, No Commissions, Free Charts and Live Prices.
Spread Bet on Indices, Forex, Commodities, Shares and more. For details see GFT.
|
The above comments do not constitute investment advice and neither GFT nor SpreadBets.org.uk accept any responsibility for any use that may be made of them.
"Gold Hits 900 Dollars" last update by B. Schlossberg, 26-Jan-2009
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
Similar articles:
EUR/USD Increases - last update: 27-Jan-2009
The EUR/USD climbed above $1.3300 on the news with $1.3384 serving as the next area of resistance. However, with the unit having come so far so fast in the past 48 hours some pause may be due. Risk attitudes will . . . read more - EUR/USD Increases.
Gold Hits 900 Dollars - last update: 26-Jan-2009
Gold spiked to within two dollars of $900/oz in holiday leaden Asian trading as saber rattling between US and Chinese officials regarding the manipulation of the yuan ratcheted the . . . read more - Gold Hits 900 Dollars.
FX Spread Bets - last update: 02-Feb-2009
FX spread betting update. A look at the factors affecting GBP, EUR, USD, JPY currency trading markets from a leading FX commentator . . . read more - FX Spread Bets.
|
|
|
Free Financial Email: Latest Spread Betting Offers and where to find narrow spreads.
Click here to sign up.
|
|
