Gold outshines in positive market

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After a weak start in October, markets bounced back yesterday helped by a surprising expansion in US factory activity, and what was regarded as a satisfactory stress test of Spanish banks. Dow Jones gained 0,58 % while  Nasdaq closed down 0.1 percent. Wall Street closed the third quarter as the best since 2010. The MSCI-index for Asia-Pacific shares were up 0,3 percent with similar positive developments in South Korea and Australia. In Japan Nikkei index rose 0,3 % after reaching a three weeks low on Monday.

The Euro/USD was fluctuating strongly during whole yesterday, dipping down below 1.28 to recover to 1.2920 before falling back. The most traded currency pair is stronger in early Asian trading at 1.2914. USD/JPY is weaker at 78.07.  The Australian dollar and South Korean currency also traded up by a US court decision which permits Samsung to sell its Galaxy iPhone in the US after being banned last month.

The European debt crisis remains investors focus.  There is still some confusion with regards to when Spain eventually will ask for a bail-out.  The German government shall according to well informed sources have asked Spain to wait before asking for a sovereign bail-out not only involving its banks. Unemployment figures released for the Euro-zone yesterday painted a very grim picture with 11,4 % percent out of work and with unemployment rates on 25 % both in Greece and Spain.

These numbers did, however, not have any clear negative impact on the Euro. Greece is this week going to present a new austerity budget for the Parliament entering its sixth year in recession. The austerity measures are disputed not only expressed through mass demonstrations in Europe. The US economic Nobel Prize laureate, Paul Krugman, accused the European governments for “austerity madness” clinging to an austerity culture which could only lead Europe into deeper misery.

Stronger stock markets also helped commodities. Brent crude is at 112,20, and the strong underlying upward trend in precious metals continue.  Gold trades at 1778 and Silver close to 35, the highest levels seen in 10 months. Copper and nickel are also up. 

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