It was bound to happen and it did yesterday. The euro (The unified European currency) crossed the $1.30 mark after spending nearly 10 weeks below that level. Today the euro is approaching $1.31, signaling a rising confidence in the euro zone, specifically after the recent upbeat sentiments coming out of Germany.
The euro also owes some of its gains to the shaky confidence in the US economy and, by extension, the US dollar. It illustrates the readiness of the traders to abandon the dollar and take flight to other currencies with the slightest hint of optimism coming from outside the US. The persistently poor jobs data and home sales coupled with what is seen by many as exorbitant spending has created a climate of fear and uncertainty in the US economy.
Responding to the dollar slump, gold is trading up at $1,164 an ounce. Gold is still 8% below its all-time high reached in June as appetites for safety have somewhat subsided. Even with the dip in gold prices, gold mining companies have been reporting stellar earnings reflecting the general rise in gold prices that started in 2009.Robert Hashemian is VP of Web Development for TMCnet.com with a keen interest in financial markets. To read more of Robert’s articles, please visit his columnist page. He also maintains his personal Web site at www.hashemian.com.