Greek deal seen as negative for gold and Euro
Here is a recent post from Julian Phillips over at GoldForcater.com and SilverForcaster.com.
Click here to visit Julian’s website – GoldForcaster.com.
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New York closed Friday at $1,163.00 up $0.60 with Asia and London taking it down this morning to $1,160. The dollar was weaker at $1,1147 down from $1.1140 against the euro with the dollar Index at 9587 down from 96.11. The LBMA gold price was set this morning at $1,154.95 down $7.45. The euro equivalent was €1,043 13 down €4.86. Ahead of New York’s opening, gold was trading in London at $1,156.80 and in the euro at €1,044.66.
The silver price rose to $15.58 up 12 cents in New York. Ahead of New York’s opening it was trading at $15.48.
The week has started with a deal between Greece and the E.U. after a frantic weekend. For gold and silver investors the details of the deal are irrelevant. It means that Greece will not exit the euro or Eurozone and so there is no threat to either, anymore. The market is reading this as a negative for the gold and the euro. But this was the initial reaction in London. The market may be in turmoil as they settle down now. Is this the end of the threat to the euro and E.U. of Greece’s departure? We think so. But it certainly isn’t the end of the Greek drama/tragedy.
The agreement means that the attention of the monetary world will revert to the E.C.B.’s quantitative easing and the desire of the E.C.B. to see a lower euro exchange rate with the dollar. We expect that if the euro does not weaken it will be because the U.S. Treasury does not want to see a stronger dollar than it is already, but may have to, as a rate hike may now be closer, after Greece.
There appears to be an imminent deal between Iran and the U.S. so the media has led us to believe. If this does happen, then the markets should pull down the oil price strongly and keep it there for a long time and will be very bad news for “Fracking” oil production. This will be a positive for the global economy having a similar impact to a tax break. But will this feed down into the economy of the world? Overall it should.
To get a balanced perspective on all of the above for gold and silver, we remind readers that these issues have an influence on speculative activity not on gold and silver’s fundamentals. However, with speculative activity having a major impact on prices until the entry of Chinese banks and an arrival of a Yuan “Fix”, when gold and silver prices are headed towards a major shift from speculative dominance, to an Asian, more fundamentally oriented pricing than we have seen for several years. Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com
I think the rest of the article did catch the general tone and perceptions in the marketplace, and the influence these events have had on the speculative activity over the real fundamentals in PMs.
Julian brought up an interesting topic at the end regarding the integration of the Chinese Yuan “Fix” in gold in silver, and more of an Asian influence in pricing, moving into the future.
Wow : Market celebrates greek deal. Had to raise my limit sell orders on several stocks including DIS disney . Common stocks seem the only option as gov. bonds and CDs pay very little. best to you all S
You’re right about bonds and CDs and money markets paying very little. This zero interest rate policy has the banks and treasuries with record low levels for about 6 years now, which punishes savers. This is why people and institutional investors have been piling into common stocks and what has juiced the markets for so long.
They call it a “wealth effect” when peoples portfolios are performing so well…..
If you walked up to the average person on the streets, I wonder if they feel that “wealth effect” in their daily lives? ( at the grocery store, at the movies, paying for their kids school, etc…)
Scott you may want to look at FOX – they get a good chunk of their earnings from Australia/New Zealand/Oceania/South Africa – good way to hedge USD.
My plan is to buy solid stocks that are underperforming due to the strong USD.
RIOTS coming to Greece mid week………zerohedge
That was based on the false report that the EC wanted the Greek Prime Minister to resign.
and he should resign……since he has gone against 60% of his people…………jmho
TOMORROW is MID WEEK………….and today the Greek deal looks worse than ever.
Now the bankers want the real estate of the country, the islands. The Greek people are not going to own anything……..Next , will be eminent domain……of all the land.
Real estate taxes are going to go through the roof……..so to speak……..
Bad for oil and gold, 800 becomes a little more likely.
Not strictly true first paragraph. It was down before the London am fix and then London piled on.