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Currencies
The euro is trading at $1.4178 and at £0.6970.
For live currency updates, check the right-hand column of the Finfacts home page.
Commodities
Crude oil is trading on the New York Mercantile Exchange (Nymex) at $87.36 a barrel - down 25 cents overnight.
The record rise in nominal dollar terms would have to hit about $103 to match the record high in real terms that was reached in early 1980.
Paul J. Harris, Head of Natural Resources Risk Management, Bank of Ireland Global Markets, commented:
Before expiring at the end of yesterdays session the November Brent crude contract hit a record $84.49 on continuing tensions over possible Turkish action against the Kurds in Northern Iraq and the projected tightness of the market in the winter months.
The market has receded somewhat overnight on a degree of profit-taking and the Dec contract begins the session around $83. The focus for today will be the EIA (Energy Information Administration of the US Department of Energy) data which, according to the consensus forecast, will show a build in crude stocks (of around 1mio bbls) and gasoline with a small draw on distillates. However, it should be remembered that the forecasts can be wide of the mark: for example last weeks forecast was for a build in crude and a massive draw was reported, precipitating a sharp spike.
The market has moved quickly upwards in six successive sessions and the opportunity for consolidation presents itself today. Key support of $82.25 is set to hold but for the bullish trend to resume requires fresh impetus which may be provided by divergent EIA numbers or an escalation of the Turkish situation. Either way $82.40-50 looks set to cap any bullish move long term but with the long end moving steadily upwards (July 08 contract through $80.56) the likelihood of advance towards the high $80s level before year end is very high.
Gold spot price
The spot price of gold is at $757.40 per ounce, up 20 cents overnight.
Mark O'Byrne, Director of Gold and Silver Investments Ireland, commented on Tuesday:
Safe haven buying is contributing to a further increase in gold prices with the new Turkish-Iraqi dimension to geopolitical instability in the Middle East. Oil prices surged to new record highs and the NYMEX October contract reached as high as $87.95 late this morning. Oil is up due to the rising tensions between Turkey and Iraq, and deteriorating relations between Turkey and the U.S. Washington sent envoys on a surprise visit to Ankara this weekend, to urge restraint, as the Turks threaten to attack Kurdish separatists in Northern Iraq.
News that the Japanese investment public with their huge surplus of savings is entering the gold market is very bullish. The Telegraph reports that gold has soared to a fresh 28-year high of $760 (£372) an ounce on fears of global currency disorder and a surge of buying by Japanese investors using trading signals and sophisticated charting techniques. "Traders report a sudden burst of activity on the TOCOM gold futures markets in Tokyo as the price breaks through the psychological barrier of 3,000 yen (£12.52) per gramme, the measure used by the Japanese to trade gold. The country's irrepressible grannies rely heavily on Ichimoku "cloud charts", multi-faceted indicators designed to give support/resistance levels in various markets, which have issued a powerful buy signal in recent days. John Reade, head of precious metals at UBS, said the Japan can be a major driver of the gold price. "Japanese buying can come out of the blue, but it is too soon yet to tell whether they are about to take over the gold market," he said. "When the Japanese public move in with reckless abandon, everybody else gets out of the way."
Bloomberg reports today that JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and BNP Paribas SA say oil, wheat and metals traders are Wall Street's hottest commodities.
Banks and securities firms hired a record 450 commodity traders this year, up 33 percent from 2006, according to Options Group, the New York-based recruitment and consulting firm that has tracked the industry since 2002. While the increase is equal to only 3.4 percent of the 13,100 new hires in the securities industry last year, commodities traders are so coveted that headhunters are turning to fired mortgage bond salesmen to fill the help wanted.
Bloomberg says that Lehman doubled its commodity unit to 200, and JPMorgan added 45 to bring its total to 170, including Foster Smith from Deutsche Bank AG as head of U.S. power and gas and Andrew Harrison from Goldman Sachs Group Inc., where he traded oil.
