Any hint of animal spirits returning to the gold market was subdued over the past week as the euro crisis entered a new phase with scary Spanish bond yields, and Federal Reserve chairman Ben Bernanke stolidly resisted any fresh hints on when he might roll out QE3.
The Federal Reserve has spoken, and there are no signs of additional easing. Federal Reserve Chairman Ben Bernanke’s basic language in Congressional hearings today indicates the FOMC will monitor and only step in after other alternatives.
The polls are in from French elections over the weekend, and Socialist Party candidate Francois Hollande beat incumbent Nicolas Sarkozy to become the next French president. Commodities are under pressure on concerns that president elect Hollande’s anti-austerity viewpoint will undo the euro zone debt crisis relief agreements the EU relies on, cleaving the Franco-German accord.
Despite trader hopes to the contrary, the prospect of yet another round of apocalyptic headlines Greece is becoming a problem again as we shift into the bottom of half of week. The disappointment is once again sending commodity prices and confidence in the euro zone lower.
As traders settle in for last two days of trading in January, the U.S. dollar appears to be favored in the safe haven arena once again ahead of the EU leaders’ summit. Remember, gold silver and copper are priced in dollars, and without any other catalyst will typically have downward pressure.
The price of gold is battling its way higher in early trading as the shiny metal moved higher as bargain hunters stepped in to the market in hopes to take advantage of lower prices.
Gold and Silver are basically flat today following the release of the latest retail sales data and before the Fed’s latest policy statement, due this afternoon.