There are more things affecting the dollar as we have seen throughout last week. Fossil fuels, metals, crude oil prices, alternative energy as well as geopolitics are on the brink of change and this may affect the dollar positively in some areas.
The debt plagued Greece is hoping for a rather substantial bailout from the Europe and is still in the same position this week. In addition, the same problem seems to be stalking Spain and Portugal as well and consequently the Euro may stay down and the dollar regain in strength after an eight month low.
With the dollar on the rise we can, as usual hope for oil and all other commodities to decline in their prices. This state of affairs translated into a downward trend in the commodity markets and even the jobless rate in the US improving to register below the 10% mark on Friday did nothing to pull back the downward trend as far as commodities were concerned.
Asian analysts are concerned with another development that may have widely felt global repercussions for the energy market and any firm that employs a commodity broker. China has been purchasing more crude oil than their present requirements demand. According to analysts, this may be to facilitate the export of more refined products from China which is going to impact heavily the entire global market.
The only safe haven from fluctuations against the dollar was the gold market. But, last week we saw the gold prices drop sharply by more than 4% and by last Friday the gold prices came down to $1,050 and ounce. Dollars in cash form seems to have taken over from gold as the new safe haven for many an investor in the financial markets.
On the 6th of January crude oil hit the highest for the previous 15 months at $83 a barrel. This of course, changed and today the price of a barrel is just higher than $71. There are fears that this may go below $65 in the coming weeks. This is going to be difficult to recover from with the European debt recovery measures are put in place. Austerity seems to be the name of the game as Europe is battling with recovering from the debt process as we see it today.
Silver and gold still dominates the precious metal market. China has been increasing the demand for physical gold due to the Chinese New Year where gold is now considered to be the favored choice for gifts.
Taken on a global scale the debt crisis will be the determining factor when it comes to the direction of both silver and gold markets. The markets may still be choppy for some time to come. Meanwhile, the European Union’s actions to firm up the banking and equity markets may lift up the Euro against the Dollar.
1 comment:
China's hoarding will soon come to an end where they will likely be forced to be net sellers of their various stashes: There will be much more hardship soon with a looming Chinese collapse bigger than the Soviet Union's.
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