What a week. It’s taken several days to recover, and we’re gearing up for more ructions shortly.
Gold movement last week was very much in response to the US Markets. We had relative stability until Thursday, when the Gold price dropped $20 to below $650, again tied into liquidity issues in the markets. Friday saw a return to $662 much like the previous week. The basis of this movement was the US Fed dropping the discounted interest rate (Govt to bank) by 1/2% which also affected the NZD which recovered, keeping the gold price lower in the local market. A volatile week, but support for bullion is again firming up given the uncertainty in the global markets. The US gold price has been stable since, with the US markets seeming to be in a lot better shape after the discount rate drop.
NZDUSD cross, this has been quite volatile, with last week seeing a huge drop to 0.665 at one stage. After the discount rate was dropped, and the markets calming, we’ve had a steady increase back in the exchange rate with this morning seeing us back into the 0.69 -0.70 range.
Going forward is expected to still be quite choppy, the general feeling is that the credit crisis in the US is still quite bad, with a lot worse to come, but once again, it’s a matter of when, and can it be corrected.
In New Zealand we’ve had the closure of another finance company (Nathan’s) which again reinforces the point, diversification is the safest route.
Another Golden palace – this time in Hong Kong (Chinese website)
