In thin trading on the first business day of 2011, the euro gave back much of what it had gained at the end of the old year, with holidays in London and Tokyo contributing to the trend.
According to a Reuters report, a European bank trader in Singapore said macro hedge funds were said to be selling the currency; he added that stop-loss trading pushed the euro further into loss territory. Roberto Mialich, currency strategist at Unicredit in Milan, said that the euro’s gains in the final days of 2010 were “exaggerated, and we expect gains to be reversed once activity really picks up.”
Meanwhile, gold resumed its steady upward trend after quiet Christmas trading. In Europe the precious metal climbed above $1,420, coming within 1% of its record high. In December it had set a record at $1,430.95 an ounce.
Reuters reported that Pradeep Unni, senior analyst at Richcomm Global Services in Dubai, predicted even greater prices for gold in the year to come. He set the initial target at $1,455-$1,480, saying that fear-driven fundamentals were driving its price: “Gold [steps] into the New Year with all its current fundamentals intact ... sovereign debt risk, macro uncertainty, concerns over currency stability, medium-term inflation fears as the U.S. Federal Reserve implements Quantitative Easing II, geopolitical tensions and low interest rates.”
There was speculation that U.S. data to be released later in the day would affect late trading.
Silver hit $31.06 per ounce, its highest price since 1980. Platinum and palladium were both also on the rise, with the former at $1,774.24 an ounce against $1,767.50 and the latter hitting $800.03 against $799.50; palladium had already hit $803/ounce, its highest price since March of 2001, before backing off.
In 2010 palladium was up 97%; silver’s price rose 83% for the year.