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Realistbear

Recovery Over As U S Markets Crash And Gold Drops

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http://uk.finance.yahoo.com/news/dollar-tipping-over-the-edge-as-traders-eye-us-double-dip-tele-f6acbb47097e.html?x=0

Edmund Conway, 19:48, Thursday 1 July 2010
The dollar is tipping over the edge as the world's largest economy teeters on the brink of a double-dip, traders declared on Thursday amid a slew of bad economic news.
Equity markets plunged and the dollar dropped to a seven-month low against the yen and slid further against the euro as fresh data showed US home sales collapsing, manufacturing activity troughing and unemployment on the rise. The figures, which come alongside growing evidence that the US recovery is stalling, sparked speculation that the dollar, which has retained much of its strength through the financial crisis, could now have passed its peak.
Nick Beecroft, currency consultant at Saxo Bank, said: "Today could be a turning point in the fortunes of the US dollar. This looks like the day that fears of a double-dip recession in the States, with all its attendant unpleasant consequences for the US budget deficit, finally trumped eurozone bank and debt concerns, which were somewhat put to rest over the last couple of days by benign drawdowns of ECB liquidity offerings and a good Spanish bond auction."

Dramatic stuff coming from Edmund. I wonder if he knows that bad news in the US impacts us too. We are no longer an isolated economy and a slowdown in the US will push us further into recession as will the EZ as they continue to struggle with soveriegn debt. Our exports have ground to a halt, job losses on the rise and the long awaited HPC is about to re-start.

What is interesting is that gold is moving in the same direction as the $.

GOLD 07/01/2010 15:49 1198.60 -43.80 -3.53%

IMO, it is not contained. Far more bad news to some in the days ahead.

Edited by Realistbear

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- Stocks Down

- Dollar down

- Interest rates up

All ticked. This is the final home run set up.

I hope it's just technical, a false signal.

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Today was a day for risk reduction. The big consensus trades took a bath ... hence why short EUR crosses and long gold got drilled (take a look at how EUR/AUD performed for example) . Note the S&P, where many speculators are short, ended the day almost flat, despite fairly awful US economic data. Squaring up was the theme.

I wouldn't read much into today's price action per se. We have NFP tomorrow and then US is out on 5th July for Independence Day. Also remember yesterday was end of month/quarter/H1 so there have been huge fx fixes going through the market for the past 48 hours.

I think by the end of next week we will get clearer signal of what investors really think. The market consensus is clearly very bearish with a real worry about deflation/double dip given recent economic activity data. We've moved from hating the Euro area in May to hating every asset everywhere. The currency and commodity angles are most interesting since people really are conkers deep on the short euro cross trade and long gold trade since its worked so well over H12010.

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Might be a fakeout given the holiday timing, it would appear the Euro 'fear' trade into gold is dead in the water.

6% down in one session is a brutal kicking.

Edited by Red Karma

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Guest spp

The fall in the paper price just brings forward the eventual physical supply problems (especially in silver)...bring it on !

Another RB buy alert??

Everthing falling apart in broad daylight once again. Bernanke must be dying to fire up that chopper. Go on Benny boy! :lol:

Edited by spp

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Gold has taken a battering!

It's deleveraging (deflation) beginning to overcome the anticipation of the next QE.

It says a lot about the extent of liquidation taking place in some quarters.

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Guest spp

Let's also not forget the timing of the drop.

You guessed it - right before the London close! :rolleyes:

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So it lost 44 bucks today?

With the present Economic Climate Gold should not drop $1 but be hitting the roof.

We are now getting cold calling on the doorstep of dealers offering us £190 per ounce for all our broken jewellery of 9 and 22 carat gold.

When I pointed out that Gold was around £800 per ounce I was informed that Gold was about to fall and he must protect himself. :rolleyes:

Errol is not worried because if Gold crashes he will buy a lot more. :D

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Some good moves for gold. Still hoping for lower prices. Buy on weakness.

A wise man once said:

"Not every dip is a buying opportunity, sometimes its a warning of a crash about to occur."

OB, seems that end of the month closing of positions a likely explanation. OTOH, the fall in gold along with stock and $ weakness was incongruous and a possible indicator of a shift in market alignment. If that is the case, the risk aversion forces are building and we may see some real action tomorrow.

The market is waiting for some big breakouts as most things, including gold, have been in a holding pattern for some weeks now.

No change in the basic scenario--sovereign debt issues will trump all else in the risk stakes.

Weird place to be right now.

UK Bonds pointing to the end of inflation concerns:

http://www.bloomberg.com/news/2010-07-01/u-k-gilts-rise-pound-falls-as-global-recovery-concerns-spur-safety-bids.html

Gilt 10-Year Yield Is at 14-Month Low on Recovery Concern; Pound Rebounds

By Anchalee Worrachate - Jul 1, 2010

U.K. government bonds rose, pushing the 10-year yield to the lowest level in 14 months, as signs that the global economic recovery may be stalling reduced demand for riskier assets.

And what, exactly, is riskier than the bed of dynamite we have under our financial situation?

Edited by Realistbear

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So it lost 44 bucks today?

I was expecting it had crashed by a few hundred bucks from all the gold angst.

Well it had me sh!tting myself till I thought about it in a more reasoned way, capital flight to the safety of the euro :huh: , give it a month or so.

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So bear, tell us all again when the euro will collapse? Am I seeing a change of opine here, perhaps I was right?

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A wise man once said:

"Not every dip is a buying opportunity, sometimes its a warning of a crash about to occur."

OB, seems that end of the month closing of positions a likely explanation. OTOH, the fall in gold along with stock and $ weakness was incongruous and a possible indicator of a shift in market alignment. If that is the case, the risk aversion forces are building and we may see some real action tomorrow.

The market is waiting for some big breakouts as most things, including gold, have been in a holding pattern for some weeks now.

No change in the basic scenario--sovereign debt issues will trump all else in the risk stakes.

Weird place to be right now.

UK Bonds pointing to the end of inflation concerns:

http://www.bloomberg.com/news/2010-07-01/u-k-gilts-rise-pound-falls-as-global-recovery-concerns-spur-safety-bids.html

Gilt 10-Year Yield Is at 14-Month Low on Recovery Concern; Pound Rebounds

By Anchalee Worrachate - Jul 1, 2010

U.K. government bonds rose, pushing the 10-year yield to the lowest level in 14 months, as signs that the global economic recovery may be stalling reduced demand for riskier assets.

And what, exactly, is riskier than the bed of dynamite we have under our financial situation?

Boy who cried wolf

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  • 258 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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