Record U.S. Treasury Auctions Continue With 10 Years

While the Federal Reserve would desperately love to have the U.S. Dollar depreciate from its currently lofty levels the unfolding dysfunctional family values referendum of the Married With Children variety in Europe keeps everyone on edge and the U.S. Treasury solvent for another few weeks.  The trade weighted Dollar index bested resistance at 80 to close up at 80.24.  The $24 billion in 10 year notes went out the door at 2.02% yield and a bid-to-cover of 3.53 to 1, second highest in history.

Of course, with no QE3 talk coming from the Fed’s FOMC minutes and margin calls happening all over the commodity sector all that money has to go somewhere.  Who needs crops planted in the spring anyways?

All risk assets got put through the wringer this afternoon as stocks, commodities and Gold all were sold like they had herpes.  Gold was off another $35 to $1635/oz. on Monday.  That puts Gold underneath the 144 Day Moving Average for the first time since the rally after the Lehman flush began in early 2009.  This would seem to be a harbinger of serious correction in gold.

Silver off another $0.50 barreling through what was good support at $31.00/oz to close at $30.88 and was soft during the afternoon Globex session.  Oil was spared the carnage as fears of a supply disruption due to war with Iran pushed prices back over $100/bbl for West Texas Intermediate crude, which settled at $100.22/bbl.

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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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