Gold price continued its climb higher for a second day after Federal Reserve announcement of third round of quantitative easing which weakens the U.S. dollar and in turn strengthen gold’s price as traders look for safety. The FMOC’s announcement of QE3 was more aggressive than most analysts were anticipating with a plan to purchase 40 billion USD in mortgage backed securities on a ongoing unlimited fashion until the U.S. economy
Welcome to today’s Morning Coffee Break – The Federal Reserve decisively stepped off the sidelines with a stronger than expected new round of unlimited quantitative easing (QE3) sending U.S. markets rallying. Market participants are clearly satisfied with the FMOC’s move as U.S. futures are indicating an extension of yesterday’s rally.
Well this week kicks off earnings season right in the middle of the euro zone storm and ahead Wednesday’s FOMC statement.
Gold is roughly flat on day going into the July 4th weekend, tomorrow will be light volume with only a half day of trading. The SPDR Gold Trust (GLD, [stock GLD]) ETF is lower by 0.14% in the final hour of trading today while the iShares Gold Trust (IAU, [stock IAU]) ETF is holding flat on the day.
Trending Stocks Ahead of the Bell for June 26, 2012
Gold was sharply higher at the close of trade this week with the precious metal surging 3.87% to close at $1622.75 in New York. The rally marks the largest single week advance since the week ending January 27th when prices soared by more than 4.4% as it approached the $1740 level
Looking at the gold charts today we find a solid bounce off support at $14.90 on the iShares Gold Trust (IAU, [stock IAU]). iShares Gold Trust has been in descending channel since early February dropping over 14% since before bouncing off solid support
Most of the major currency pairs continue to show significant correlations with the MSCI World Stock Index, suggesting that broad-based risk appetite trends remain dominant as drivers of price action. This puts thematic macro-level concerns – specifically, the durability of the US recovery and its ability to offset headwinds from Europe and China facing global growth – squarely at the forefront. The US economic calendar is relatively quiet, with headline event risk clustered at the end of the week as PPI and UofM Consumer Confidence readings cross the wires on Friday. This puts the onus on evaluating the extent of downward pressure.
The ongoing political turmoil in Europe continues to shake the markets, with the inability for Greece to form a government now fueling speculation that the country might soon exit the Eurozone. Although an exit by Greece would have only a minimal impact on the broader economy, given the country’s size, fears of contagion seem to be the bigger problem right now, as investors start to price in the impact this will have on larger economies like Spain and Italy.
Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial British Pound: Correction In Focus, BoE To Discuss Exit Strategy Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial The Euro tumbled to a fresh monthly low of 1.2954 as French President Francois Hollande overtook Nicolas Sarkozy as the president of France, while the two main parties in Greece failed to obtain a joint majority, and the
You must be logged in to post a comment.