Gold And Silver Plunge As EUR Reaches 15 Month Lows

Tyler Durden's picture

It seems funds left redemptions until the last minute in the vain hope that everything will be fine in the European dis-Union as we see renewed selling pressure in EURUSD - taking out the January 2011 swing lows (as a mediocre Italian auction and failed Hungarian auction weigh heavily on the expectations for a 'solution' or firewall). Gold and Silver are also legging down hard (the latter now -9.5% from Christmas Eve) and the former loses $1550. Gold took out its September 2011 swing lows back to near six-month lows.

The USD is up around 1% since Christmas Eve's close with the EUR (and cable) underperforming and JPY outperforming (the only major cross that is stronger vs the USD). It also seems the AUD has a renewed corrrelation with the USD as we see Aussie bonds (the only 'safe' AAA govvie?) bid to record low yields.

Silver is the obvious (high beta) loser in this redemption/liquidation battle but Gold is 'decoupling' from copper here also. Interesting that Oil is stable just under $100 (and practically unch from Christmas Eve).

European sovereigns are all leaking wider with 10Y BTPs now almost 40bps wider than their tights yesterday, Portugal 10Y now 43bps wider than Christmas Eve's close and France 10Y also leaking badly (+15bps).

Elsewhere, ES is modestly higher from yesterday's day session close (as correlations with a weak Gold market are helping while every other risk asset driver is pointing negatively or flat). European corporate and financial credit spreads are notably wider (investment grade +7bps from yesterday's tights, Crossover +25bps, and senior financials +11bps) as European equities are now down nearly 1% from the Christmas Eve close.