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Markets in Risk-Off Mode Due Problems in Europe

August 16, 2011 at 19:09 by Vladimir Vyun

The depressing macroeconomic data from Europe turned markets to risk-off mode. As a result, gold advanced, while crude oil and copper retreated.

Germany’s gross domestic product, according to the preliminary estimate, rose 0.1 percent in the second quarter of 2011, compared to the increase by 1.3 percent in the first quarter of this year. The GDP of Eurozone advanced 0.2 percent in Q2 2011, while in Q1 the advance was by 0.8 percent. The trade balance deficit of the euro area increased to €1.6 billion in June from €0.8 billion in May on the seasonally adjusted basis, while market analysts expected a surplus of €0.3 billion.

Futures for gold delivery in December advanced $29.30 (1.7 percent) to $1,787.30 per ounce as of 10:45 on COMEX, following the 0.9 percent gain yesterday. September futures for crude oil delivery fell $1.05 (1.2 percent) to $86.83 per barrel by 13:55 on NYMEX after yesterday’s jump by 2.9 percent to $87.88. Contract for delivery of copper in three months traded at $8,917.75 per metric ton on the LME, erasing the previous gain of 0.5 percent.

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