17 April 2013: Wall Street lifted by Gold and earnings

US-stocks jumped more than one percent on Tuesday recovering after the worst fall since November. Gold prices rebounded from bottom level on USD 1351 and trades at 1379, but selling levels still persist. The US stock indexes were lifted by good earnings from Coca-Cola and Johnson & Johnson. The bullish sentiment was also helped by inflation data which reinforced expectations that he Federal Reserve will keep the stimulus. After two falling days, Asian stock markets are back in positive territory.

Gold prices jumped 30 dollar during yesterday’s session after falling 8,8% on record volume on Monday. Gold reached 1382, but is still under strong selling pressure as investors rushed to dump gold. Gold prices suffered their sharpest fall since the 1980’ies heightening fears among investors that precious metal’s decade long Bull Run has ended. Silver also fell 11% and trades at 23,42. Silver was trading above USD 35 just a few months ago, and reached nearly the mark USD 50 just two years ago.

The gold selling fever initiated in Cyprus where the government last week stated readiness to sell its gold reserves to help finance IMF and ECB demands for bail-out assets. Rumors indicated that other pressed Southern European countries would follow suit. Faltering European demand and weaker than expected Chinese economic data depressed oil prices. Brent crude fell to a nine-month low and reached USD 98 a barrel bottom. Brent has also recovered and trades again above USD 100.

The Japanese yen (JPY) eased in Asian trading this morning as it succumbs to new pressure as gold recovered. The historic plunge in gold prices coupled with fresh concern about China’s economic growth, saw some investors plunge back in yen as a safe haven reversing the downward trend sparked by Bank of Japan’s aggressive stimulus program. USD/JPY trades at 98,19. The USD has lost ground against the euro which has gained momentum after breaking through the stiff technical resistance at 1.3110/20. Euro is at 1.3173 as Euro bulls shrugged off a report on sharp April-fall in German investor sentiment.

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