Gold ventured upwards on Wednesday and it will continue to get the attention of many as the ship sinks slowly for the EUR. The question that must be asked by investors is about viability of perceived safe havens. Correct, it may not be the end of the economic world as we know it, but major concerns fester. If the EUR were to really lurch off into uncharted territory and have nations leave its monetary union what would be the knock on effects?Many believe it is not a question about if the Greeks will leave the EUR but when. The precious metal in the meantime has seen volatility most of the spring and has essentially traded in a consolidated mode thus far during the summer. Yesterday however saw Gold go back over $1600.00 USD and is near $1610.00 as of this morning. Yes, the EUR did add some value yesterday. The inverse relationship of Gold and the USD is well-known, but what will investors do if they start to believe the EUR has no future and do not want to put all of their holdings into the USD? Not to say any of these things are definitive, but traders should always look to take advantage of future storms. Forecasting them is not always easy but there are enough clouds on the horizon to offer hints.
The GBP lost value to the USD yesterday on news that the GDP report from Britain was less than, yes, sterling. The result of minus -0.7% missed the estimated decline of -0.2% badly. Some blamed weather and weaker consumer spending, a cynic might say it simply is another manifestation of bad sentiment in a bad economy. As said before in earlier analysis the GBP may have its own problems, but at least they are not on the same level as the EUR.
Bourses showed some gains internationally yesterday, but a mere bounce upwards in what has been a declining market may prove to be nothing more than short-term risk taking that proves fatal unless one is quick enough to get in and out of trades exactly at the right moment. Core Durable Goods Orders data will come from the States today along with weekly Unemployment Claims. And just as a reminder next Friday are the Non Farm Employment Change numbers from the U.S. and with a nervous crowd of investors this report that could prove to have significant impetus.