Gold is drifting slightly below $1,600 mark this morning after showing great resilience in the face of a surging dollar yesterday. The dollar is oscillating above and below yesterday’s close today, and oil is trading steady.
Everyday citizens in Europe are still spooked over the seizure of a portion of large bank accounts in Cyprus, to help pay for the bailout of what one EU finance official called “a casino economy.” Cyprus was used by many Russian oligarchs as an offshore banking center in efforts to avoid taxes back home, a factor blamed for the overweight banking system. These jitters left European stocks and the euro flat in trading Tuesday, while German bonds continued to see marked inflows as European investors sought safe haven.
Speaking of the large amount of Russian deposits in Cyprus, Reuters is reporting that much of that money fled the island nation through the U.K. and Russian branches even while Cypriot banks were closed, leaving ordinary Cypriots to bear the burden of the bailout
Physical buying in Asia has subsided since gold broke the $1,600 mark, but may return on a large dip in price.
In the U.S., stocks are opening higher on good economic news. Durable goods orders improved by 5.7% after dropping 3.8% in January. February’s positive numbers came mostly from the transportation sector. Other industrial metrics were mixed, tempering any exuberance over the durable goods numbers. The S&P/Case-Schiller index of home prices rose 8.1% in January when measured against January 2012, following a 6.8% YOY increase in December. The Commerce Department reports that new home sales in February were 420,000 units, compared to 437,000 in January, showing continued strength of the housing market.
Other news due today is the Consumer Confidence Index and the Redbook retail sales report.