gopalakrishna

Bullion prices tried for higher ground as the new week began overseas amid a variety of localized geopolitical hotspots. Bombs exploded in a variety of locations around the world (Turkey, Iraq, India, Gaza, Pakistan) keeping global worries on full boil.

Rising prices once again dented Indian demand which had shown signs of life at prices nearer $915 last week. Crude oil made advances which brought it to near $124.50 per barrel in the wake of a fresh Nigerian militant attack on a Shell pipeline in that country.

Speculators in black gold turned net short for the first time in 17 months according to the latest CFTC data. In the interim, the dollar traded at a one-month high of over 108 yen but was still being capped by the aforementioned rise in oil and was last seen near 72.72 on the index.

The euro (at 1.574) may have started the week off on a better note, had it not been for profit warnings from RyanAir and the weakest reading in German consumer confidence in five years. The greenback traded at a three-week high against the common currency before slipping on expectations of widening credit losses after two more small banks closed shop last Friday and their deposits were sold to Mutual of Omaha. No depositors lost money on the event. Confidence is another story...Seven US banks have failed year-to-date.

New York spot prices opened very near unchanged from Friday, but showed a bias to the downside, losing $2.80 and quoted at $925.50 per ounce as participants geared up for a slew of potentially market-moving US economic figures slated to hit the wires from tomorrow on. Consumer confidence, GDP, employment and Case-Schiller home prices might all have an impact on the dollar, stocks and commodities as the week progresses. Oil however, remains the central focus among participants as it has had such an influence over practically everything for the first half of this year.

Just when discoveries of manipulation in the oil market started to be made, players in the black gold pits got a reprieve-of sorts-from...their friendly Republican lawmakers. The Financial Times reports that: "A US Senate proposal designed to curb speculation and increase transparency in the energy markets was blocked by Republican legislators on Friday. The move frustrates Democratic efforts to show the party is taking action on record petrol prices. The Stop Excessive Speculation Act, sponsored by Harry Reid, the Senate majority leader, fell 10 votes short of clearing a procedural hurdle." Long live the lobbyists.

Silver lost a penny, opening at $17.33 while the noble metals made small advances with platinum adding $3 to $1743 and palladium gaining $3 to $385 per ounce respectively. News that Toyota -now the leading global vehicle seller- has lowered its global sales forecast to 9.2 million units (down 350,000) could keep platinum under cautious trading conditions. Barring further geopolitical news of import (such as Iran announcing that it now has 6,000 enriched-uranium producing centrifuges) gold may trade between $920 and under $940 today as the trade preps for the busy economic calendar ahead.

What initially looked like a summer mirage for the US dollar's recovery prospects may now be taking on somewhat more palpable characteristics and has dollar bulls encouraged for the n th time in a couple of years.

The Arab Times reports that: "Last week, the US dollar recovered heavily across the board as inflationary concerns highlighted the likelihood that the Fed might need to act as soon as possible to raise interest rates in order to contain inflation."

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