Gold Update

ufx.com - gold pricesAfter President Obama commented on the strength of ISIS and stressed that traders can be a global coalition to be used to assault the terrorist organization, the precious metal climbed over to $8.00 today trading at 1223.70.

Data expected later today may present that the personal spending of the U.S. expanded in August following last week’s data showing how much the largest economy of the world has flourished the during  the second quarter of 2011. About 70% of gross domestic product accounted for consumer spending.

On Sept. 26, holdings in the SPDR Gold Trust that served as the largest gold-backed exchange-traded product were contracted from 0.1% to 772.25 metric tons, since December 2008.

India’s demand for gold is reported as growing substantially due to the coming season for festivals and weddings now fast approaching. There are added reports that substantial amount of bullion has been purchased purchases by the ‘super rich’ as security against any substantial downturn of supply in the stock market and the  continuing conflict in the Middle-East, North Africa and Ukraine. So the current weakness in the price of gold is not justified.  This implies that the main depressor of the recent gold price is the strength of the U.S. dollar adversely impacting the lower dollar price of gold; however, the decline is not considered as severed compared with other currencies.

 

Central Bank Intervention Draws Near as Ruble Goes on a Record Low

The ruble is now one of the world’s worst performing currency for the 3rd quarter of 2014.   Russia’s Central Bank has already announced that it would make steps to remedy the situation.

The currency went down to .8% to 44.2450 against the Central Bank’s reserve of euros and dollars as past 8pm last night.  This rate is now with the .4% of the set threshold that would allow the Central Bank to start purchasing rubles as part of its mandated guidelines.

Russian policy makers interfered last May which brought up to $40 billion the value the country sold this year to stop the migration from local assets that showed so much growth after President Vladimir Putin occupied the Crimea Region in Ukraine.

Companies in Russia will feel dollar-funding stress as well when the $35 billion of Russian debt matures by the end of the year.  The EU and USA’s sanctions due to the Ukraine conflict will be an additional factor to the downfall of the economy.

European Currency

ufx.com - european countries moneyEUR/USD pair has crumbled down its core target 1.2787/55 zone as the 61.8% retracement of the whole bull trend from 2012/14 and July of 2013 are low. It appears that prices are nearing exhausted term that the resistance at 1.2785 must cap to keep the instant risk down for a direct extension to 1.2662 beside the November 2012 low. Below would direct for 78.6% retracement of the 2012/2014 uptrend at 1.2460.

A bigger picture sees a scope for 1.2215/10 possibly as far as the 1.2042 down on 2012. The 1.2762/70 followed by1.2785, are above resistance showing that see a move back to 1.2801/16.

The euro fell to a 22-month low against the USD touching $1.2663, so far the strongest level since November 2012, much ahead the ECB meets on Oct. 2

Italian Prime Minister Renzi reiterated that Italy will not be initiating new taxes. Italy has the amount of eu1.5b set aside to assist workers who are unemployed. His government is also planning to reduce the number of labor laws. This way Italy shows its needs are simple and they are an open and flexible labor market.

German Lender Faces Money Laundering Probe

The Commerzbank AG or CBK is seeking for a solution to the US inquiry into the German company’s violation of the anti-money laundering laws.  The source of information revealed that Fed prosecutors based in Manhattan are making investigation on CBK that is not connected with the sanctions case against them. The sanction case is nearing its resolution.

This new investigation is looking whether CBK failed to meet the responsibility to prevent as well as detect money laundering activities.  Wall Street reported this detail at the close of the trading week.

The American authorities have been calling the attention of the world’s largest banks for the very lean control on money transfers.  This allows terrorists and those dealing with drugs to transfer money from one part of the world to another.

Commerzbank is Germany’s 2nd largest lendting institution has already committed last year to the Fed that it will make the necessary restrictions and adjustments to meet the anti money laundering rules especially in its NYC branch. As of today, the company did not accept that they have done anything wrong in this regard.