Gold Shines On

Gold climbed to new record highs on Tuesday continuing its winning streak as safe havens with a touch of speculative flair were sought by investors. Volatility continued to rip through the Forex markets as the EUR, GBP, JPY, and AUD all gained against the USD. Economic data from both Europe and the States turned in disappointing results as the German GfK Consumer Climate underperformed and New Homes Sales from the U.S. missed its estimate. The housing sector in the States continues to be depressed. Wall Street and other global bourses turned in cautious results yesterday too. Essentially what has taken place is that Gold has attracted investors who have many concerns about the financial health of the major economic spheres. While the EUR has done remarkably well the past few trading sessions, concerns remain strong about the ability of Europe to manage its Sovereign Debt crisis. And no small matter is the ongoing saga from the political front in the U.S. about raising the Debt Ceiling.

While the core issue about debt and growth remain tangible in both Europe and the States. The micro factors such as a depressed housing market, a soft employment outlook, and lagging consumer confidence have all taken a toll on many aspects of the economic environment. The U.K. turned in a result of 0.2% for its Preliminary GDP. While this result met expectations head on it is not the kind of number that will launch a celebratory parade. Inflation data will come from Germany today, Core Durable Goods Orders are on the schedule from the U.S. along with Crude Oil Inventories. For a clue about overall sentiment about the markets, traders can look at the difference between the prices of Gold compared to the value of Crude Oil. While the precious metal has achieved new highs the price of Oil has languished in a consolidated fashion because there are true concerns about future demand.

The EUR has been able to sustain good momentum even as questions persist about the Sovereign Debt crisis on the continent.  The impetus the EUR has gotten from a solid performance by the E.U. ministers last week cannot be underplayed. However the long term problems for the E.U. have not been solved and traders may start looking at the Single Currency and question if it is overvalued. There will be no earth shattering economic data from Europe the remainder of this week. Tomorrow German Unemployment Change numbers are on schedule and Friday will see Retail Sales from the nation. But the crux of the matter for the EUR remains its bonds market and the counterweight that is taking place across the Atlantic because of the political wrangling that continues in Washington about the Debt Ceiling.

The AUD finds itself at highs as Gold has transformed itself into a workhorse for investors. The AUD is experiencing plenty of momentum and some analysts may be questioning its ability to keep up the fast pace. In the meantime the AUD must continue to be monitored closely and its short term trend is mirroring the price of Gold. The precious metal as of this writing is around 1624.00 USD. The JPY also has climbed a few pegs in value and is near its highs against the Greenback. The JPY has proven to be a safe haven magnate before and is living up to its reputation again.

Going into Wednesday’s trading session traders have plenty of strong trends and record values to take into consideration. The CHF, Gold, and JPY are all proving that they have many backers. The month of July is nearly done and investors will be going into August, which is traditionally a relatively quiet month because of summer holidays, with a profound amount of questions about the outlook for the global economies and what influence they will have on the broad markets.