14 Jan

Speculation of Greek exit leads investors to gold

WRITTEN BY Anuradha Garg

Greece’s subdued performance

Much like the economies of Italy and Spain, Greece’s economy has shown subdued performance over the years, to say the least.

Greece is seeking a bailout extension, but this will only be possible if it agrees to the troika’s conditions, or mandatory economic reforms. The European troika consists of the European Central Bank, the European Commission, and the International Monetary Fund. The reforms the troika wants to impose are austerity measures that are now the focus of a heated debate in Greece.

Speculation of Greek exit leads investors to gold

Greece is making headlines on a regular basis these days. The country’s internal political strife appears to be threatening the entire Eurozone’s financial and political stability.

In 2010, Greece was the first economy to spark the European debt crisis, followed by Ireland, Spain, and Portugal.

The conjecture that Greece may exit the Eurozone was sparked by a report published in Spiegel, an online German news magazine. The report said that German Chancellor Angela Merkel believes the Eurozone could cope with Athens leaving the common currency, a scenario popularly dubbed a Greek exit or Grexit.

Greece’s snap elections

Greece’s snap elections are due on January 25, 2015. Opinion polls show Greek Prime Minister Antonis Samara hasn’t narrowed the lead of his top opponent from the Greek anti-bailout party Syriza, boosting concerns that a change in political leadership could spur an exit from the euro area.

 Instability and gold

Gold futures rose to an 11-week high on speculation that Greece will abandon the euro. This boosts the appeal of precious metals, including gold (GLD), as a safe haven asset. This also positively benefits gold companies, including Newmont Mining Corporation (NEM), Goldcorp (GG), and Agnico Eagle Mines (AEM). It also benefits ETFs investing in these stocks, including the Gold Miners ETF (GDX).

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

14 Jun

Why Kimberly-Clark Stock May Stop Rising

WRITTEN BY Amit Singh

Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.

172.31.71.127