The stuttering U.S. economy and continuing concerns from the Eurozone have wreaked havoc on commodity prices, as the safe-haven rush to the U.S. dollar has seen investors selling stocks and commodities across the board.
The fallout from the weekend’s Greek election gathers pace, as Alexis Tsipras, whose Syriza party has vowed to rip up the terms of Greece’s international bailout, was handed the mandate to try and form a government after Antonis Samaras of New Democracy failed to forge an agreement.
Greenback Benefits
Fundamental data from Germany was good news with Industrial Production (not surprisingly) being wide of analysts' expectation, showing an increase in production month-on-month by 2.8%, as opposed to the 0.8% analysts had forecasted. The year-on-year figure beat the -1.2% figure by coming in positively at 1.6%. The Euro currency, however, found no relief in this, trading to the downside all session. The beneficiary of the gloomy global macroeconomics has been the U.S. dollar. The greenback, as measured by the dollar index, which track’s the currency against a basket of six other currencies, is pressing up once again to the psychological 80 level. The index is currently at 79.78 versus a 79.56 low and a 79.89 high.
China's Gold Buys
Gold imports from Hong Kong surged in the first quarter of the year. Imports were up seven fold but the secretive nature of the transactions and release of the information has done nothing to support or bolster the price of gold, which has traded through its $1630 support, triggering sell stops in the $1625 area. The metal is on the session lows at $1603.50, which is 2.1% lower on the day and a 4 month low. The day’s high has been $1638.61. Silver has followed the yellow metal south. The metal is lower by almost 2.5%, currently trading at $29.33. The day’s low has been $29.23 versus the high earlier of $30.08.
Oil
In further commodities we see crude dropping further still. Oil is taking a battering with the black gold becoming something of a bell-weather, indicating the level of broader global growth. West Texas is 1.4% lower, breaking through the $97 per-barrel mark. It is currently trading at $96.60 versus the high of $98.03 and the $96.57 low. Brent crude is lower by the same percentage currently trading at 111.70. The day’s high has been at $113.16, with a low of 111.18.
