Archive - Jun 8, 2011 - Story

Gold and silver are lower today despite European equities falling for a sixth day on sovereign debt and economic growth concerns. Bernanke’s failure to even suggest that the Federal Reserve will embark on further stimulus and QE3, after QE1 and QE2 failed to kick start the US economy, has markets jittery. Moody’s warned that the UK was at risk of losing its AAA rating if growth remained weak and the government failed to meet its budget deficit reduction targets. This is almost certain as the UK is now seeing a new bout of weakness in the housing market, and stagflation. Gold remains near record highs in sterling (£949.82/oz) and looks well both fundamentally (given the risks posed to the UK economy and sterling) and technically. Gold looks well supported above £900/oz and may be consolidating over £900/oz prior to a move to £1,000/oz.

A snapshot of the European Morning Briefing covering Stocks, Bonds, FX, etc.
Market Recaps to help improve your Trading and Global knowledge

I’m not sure what prompted me to consider this subject on my commute this morning, but it probably has to do with my reflecting on Memorial Day just passed. That and the fact that crude oil continues to trade around $100/bbl and the implications for energy prices going forward—for the consumer and the countries who supply them. One of those countries is Russia which produces 12% of the world’s oil. As one whose company sometimes does business with Russian firms, I’ve found it helpful to understand their mind-set as I do any foreign customer whose worldview originates from a different vantage point than my own. And one thing I have learned is that the Russian historical narrative of World War II is far different than ours. I must say that when it comes to what they once referred to as “The Great Patriotic War” their memories are more accurate in my view.