Equity Markets Mixed, Gold Rallies in Subdued Market
Gold tracked sideways for most of the week, as better than expected economic figures from the United States was tempered by nervousness over the Greek debt and austerity package.
Better than expected retail numbers from the US, which showed a pick up in sales during January, and lower than expected weekly jobless claims on Thursday failed to take away European gloom as figures showed UK employment prospects weakening. Though street riots and demonstrations in Athens had abated by Friday, and the Greek parliament had signed off on further and deeper austerity measures in order to receive its €130 billion bailout package, the situation is still tenuous.
European Finance Ministers meet on Monday, while the United States celebrates President’s day, and it is hoped that they will rubber stamp the deal and prevent a Greek default on its debt. However, some European countries are saying that the Greek measures don’t go far enough and that she should be subject to deeper scrutiny and control from the center moving forward. It is also expected that the final amount required has already risen from €130 billion agreed in November to nearer €145 billion today.
The sum result of the week was a tick up in American equities, where markets indices gained over 1% to post the sixth weekly gain of seven this year, and a fall in Europe. In fact, the only equity market to make gains last week was Denmark, all other reacting negatively to the continuing saga that is Greece, debt, and the Euro. It has been reported that there is a rift appearing in the German government, with at least one minister saying that Greece should be allowed to default and Angela Merkel insisting this is not an option for Europe.
In quiet Friday trade, as markets await the meeting of European Finance Ministers on Monday and the G20 meeting at the end of the week, with President’s Day also weighing on volumes, gold struggled to stay in the black for the week. It eventually did so, finishing at $1722.90, a gain of 0.33% and in the middle of a tight weekly trading range of $1706 to $1736.
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