LONDON: Gold fell to near its lowest in almost four weeks on Wednesday, on a stronger dollar and hopes for progress in the Greek crisis after the country told international creditors Athens could accept their bailout offer if some conditions were changed. The Greek situation has failed to spark robust safe-haven bids for gold, with bullion investors still focused on an expected increase in US interest rates after more strong economic data.
NEW YORK: Crude futures hit 3-week lows on Monday as Greece shut its banks and imposed capital controls, causing widespread risk aversion, while Iran looked likely to extend nuclear negotiations with the West to export more of its oil into an oversupplied market. The dollar initially surged against the euro on the Greek jitters, but it later retreated, limiting the downside for oil. A softer dollar makes commodities priced in the greenback more affordable for holders of other currencies.
While laughing at the amusing exchange of letters between the CEO of Titan and Arnaud Montebourg, Minister of Industrial Renewal of France, I awaited the latest PMI report on France, expecting findings to be horrific.
Dr. Doom got it wrong.
The parade of economists and investors led by Nouriel Roubini predicting Greece’s ejection by now from the eurozone failed to appreciate the resolve of European policy makers to protect their union and the amount of pain Greeks are willing to stomach.
With everyone watching and analyzing US jobs data on Friday, there were a number of other news reports showing steeper contractions in much of the world. Let's start off with a look at the rapidly deteriorating eurozone.
Markit Eurozone Composite PMI® – Final Data
Markit reports Eurozone downturn continues at start of Q3 2012
By Parsimony Investment Research:As bad as the debt problems in Europe seem, we have a bad feeling that the situation is even worse than any of us expect. Last Friday, Standard & Poor's downgraded their ratings on nine Europen countries as efforts to fight the crisis have fallen drastically short. Most notably, S&P lowered the top ratings of France and Austria one level to AA+, leaving Germany the Euro area's only stable AAA grade.