Skip to main content

Year Ended 12-31-2010 -- Metals , Crude & U.S. Treasury this year .


Beside stock markets different other markets gave spectacular results in year 2010. Since some stock markets are in over-bought zone many investors are diversifying their investments.  let see some ---

Precious Metal & Crude at  2010
In 2010 many experts said much about gold some says Gold may be in bubble, some  said that it may touch 2000 level. But up to now no one is  proved to be correct.

This year Gold made substantial gain of almost 30%. Many European countries  as well as U.S.  are facing huge economical problem, especially currency related problem and also fear of stock market crash compel  many to choose Gold as a secure place to invest. In  year 2010  many  nations also bought  lot of  Gold form IMF.


Now with gold demand there will be Silver demand too. Silver up more than 80% this year, a new 30 year high. It seems to be that Silver will carry this move some more time in 2011.

Copper also gained nearly 30% in 2010 .Copper is in new all time high this year. The Chinese demand is one of the main cause for this year high as well as manufacturing is picking up in other parts like  U.S. and  Europe.  US$ weakness also plays it’s part this year for Copper’s  price action. Except China most other countries have low Copper inventories.  So if in coming days economical recovery gathers  strength we may see more price up for Copper.
When talking about commodity one thing I must say Palladium which roses more than 90% this year, quite outstanding.

Crude  oil’s  gain was not substantial  in year 2010  but looks like,  it is going to break 100 this year 2011, unless the economic conditions become worse.

Currencies at  2010
Let see some currency movements in 2010.

CURRENCIES
1/1/2010

12/31/2010

%






EURO/USD
1.4324

1.3373

-6.63%






USD/JPY
92.72

81.1

-12.53%






AUD/USD
0.898

1.0238

13.91%






GBP/USD
1.617

1.5593

-3.58%






USD/CAD
1.052

0.9958

-5.34%






USD/RUPEE
46.65

44.81

-3.94%






MEXICAN PESO
13.07

12.31

-5.81%






SWISS FRANC
1.034

0.9338

-9.69%



As in U.S. interest rate was in very low level,  investors were looking for better assets to invest. So there were and are  a shift of investments and as a result  U.S.$  was and is  getting weaker against many other currencies. 

Japanese yen is one of them which gain more than 14% this year. The problem is  Yen has not appreciated because of some huge developments happen in Japan, but rather it increase because afraid investor transferring their investment from  Europe and USA in Japan. As a result Japanese currency is gaining but it’s export is facing the problem, which ultimately effecting Japanese economy.


Now every body talking about Swiss Franc Swiss franc which gain more than 10% this year against the US$. Actually Swiss Franc has risen against both US$ and Euro from the beginning of financial crisis, I think it is consider as safe haven in Europe. few days ago Swiss Franc was all time high against Euro.

Aud  gains nearly 14% this year again US$. It is the strongest performance of it’s life.
Dollar- Euro relation was little bit flat  this year as both of them facing  economical problems, so those clearly reflect on the Euro-Dollar value. Now one more member  is added with Euro that is Estonia. This inclusion is interesting for the fact that some experts were suspicion about Euro’s fate in future.
Chinese Govt  allowed a limited currency appreciation after 2 year in mid-2010. But how much it costs to china is a matter that I should be looking  in future.


Us treasury bonds at 2010
Beside Gold US Treasury to some extent may be consider as safe haven. 

U.S. Treasury
1/1/2010

12/31/2010

%






1-Year Note
0.435

0.271

-37.70%






2-Year Note
1.14

0.602

-47.19%






3-Year Note
1.664

0.996

-40.14%






5-Year Note
2.682

2.005

-25.24%






10-Year Note
3.835

3.292

-14.15%






30-Year Note
4.632

4.332

-6.47%



Though I don’t have details data, let see 10 year Treasury Yield chart.

It will be not good to compare the year end data because around Sep-Oct end  Treasury yields were very low comparing to the  31st December  yield figure.  As yield and bond price move opposite direction, lot of holders of this treasuries made huge profits.
I think it will be wrong to invest more  on U.S. Treasury because, I think the yields are going to increase in future lot. The important thing is sometime  movements of USD is very much related with Treasuries, so individual should be careful about this. Not only  U.S. Govt. but others too made lot of profits  by selling bonds at high prices. I will write on this later.

Coming year 2011  for  Commodities  &  Treasuries
 As  Venezuelan  minister told about oil’s price of $100, I think oil is surely moving in that direction if not more. The growing demands of Emerging nations and recovery that are going on in U.S. and Europe may fuel it more. There is also a huge competition going on between the countries to secure oil fields from African countries. So all these leave us no place than increase in oil’s price.  To a certain limit we also can relate this movement with stock market.
The boom period of some of the Metals will be there as long as there is need of them for fulfilling  growing economical needs, especially the developments those are going on China and other Emerging nations. We also cannot forget that  U.S. and European nations are also recovering to a extent. I think unless the uncertainty related  to  Europe &   U.S. reduces to a extent, their currency will be on pressure, even in 2011.  So it will be  very immature to predict the movements of  Swiss Franc and AUD and others as short-term.
Now as there are uncertainty,  the investments will move in Gold & other Precious Metal markets and to some extent in  U.S.Treasuries and other Bond markets. If I have to choose now between Gold and Treasuries, I will go for more secure one. I  think it will be better to decide this by individual  himself ….



NOTE :  Please see the disclaimer below this blog.

Popular posts from this blog

DAX forecast for coming week ended 15th March, 2013.

This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
NOTE: Please see the disclaimer of this blog.

Fed’s rate hike Vs Sovereign rating up gradation

Financial market is very much worried about the rate hike in US, probably this is going to come in coming December. But I think that is not going to change much of the things. Even Fed hikes rate in December it will be not so much, because we are forgetting one thing that interest rate in US is around zero so even they hike rate by 0.25-50% basis points (at most) in this year that will not be enough cause for Dollars to change their locations around the world especially markets have already discounted this coming rate hike in US.

A new disaster is coming in EU banking sector, whom to blame, big Audit firms!

First I was thinking what should be the title of this posting? Will it be good if I write that big audit firms set the time for EU bank collapse! If someone is thinking that financial crisis is over then think twice because the coming EU banking crisis is no way less than 2008 financial crisis. The time bomb will explode at some point of time in future, the time has not yet set for it. In that tsunami, forget about the smaller if any major banks collapse then I will not be surprise.