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Market responses to Cowen and the bailout

  • 22-11-2010 7:51pm
    #1
    Cavehill Red
    Registered Users, Registered Users 2 Posts: 6,109 ✭✭✭


    I've been watching the precious metals markets today.

    As soon as they opened late last night, following Cowen's speech confirming the bailout, gold fell against the euro immediately, as might be expected.

    After all, the euro should strengthen now that Ireland was taking the bailout and saving the single currency, right?

    But then something strange happened. Gold started rising against the euro within minutes, and continued to rise nearly all day. Clearly the precious metals markets weren't convinced that the bailout was going to work. The euro kept weakening.

    Until just now, when Cowen made a speech effectively confirming the end of his government and pleading with a bit of time to try to get the budget through.

    Suddenly, Cowen's confirmation of chaos in his government had a strange effect. The euro ought to have plummetted at that news. Instead it started rising against gold again and still is as I write.

    The gold market is treating Cowen as a counter-indicator!

    Have there been any other unexpected market reactions to this bailout or to Cowen?


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