On Monday, there was generalized (mild) profit taking on markets following the extreme risk off trading that dominated last
week. This resulted, among others, in moderate gains for oil. Despite the fact that Brent was seen even below 96 USD per barrel (USD/bbl, 16-month low) in intraday trading, the frontmonth contract eventually closed just shy of 99 USD/bbl.
Spot gold posted small losses on Monday and thus fell slightly below 1620 USD per troy ounce. With regard to the ECB monetary meeting due to tomorrow, we think it might be rather neutral from the perspective of the yellow metal. The ECB hasn’t bought bonds last week, according to their weekly press release, despite Spain’s insistence to do so. It is a sign the ECB tries to keep out of the current “play” and wants governments to take their responsibilities. Hence, as we already discussed, the most interesting event from the perspective of the yellow metal might be the testimony of Fed’s chairman Bernanke on Thursday.