Hosni Mubarak’s “farewell” speech late yesterday turned out to be a case of “But, Wait, There’s More!” that would give Ron Popeil a serious case of TV pitchman envy. The surprise announcement that the Egyptian “leader” intends to stay in place until a formal power transfer would take place later this year caught most everyone (including the White House) by surprise.
Previously, most global leaders were in accord that the transition of power in Cairo ought to begin on the same timetable as that demanded by the tens of thousands of people shouting and waving shoes in Tahrir Square, i.e.: NOW. However, “now” appears to be possibly “later” as the Egyptian military is apparently siding with Mr. Mubarak. How much “later” depends on the degree of patience and restraint that will be exhibited by the masses. As of the moment, the prospects and emergent signs of a civil war, unfortunately, hang heavy in the smoky air above Cairo.
World markets fluctuated while showing the same signs of indecision about how to react to the new “situation” as those exhibited by everyone from Mr. Obama to other heads of nations. Equities, gold, and oil all oscillated back and forth between negative and positive price-change territories as investors struggled to make sense of the mess that hardly anyone is able to make sense of, within, or outside of Egypt. More of the same appears to be on tap for today as massive demonstrations are about to unfold in Cairo and as markets get ready to wrap it up for the week. One would presume that – just as was the case two Fridays ago – (at least gold) market speculators might want to go home on the “safe” side. But, even that remains to be seen, as of this uncertain hour – things could change at, literally, any moment.
New York spot metals prices opened a tad on the mixed side. Gold showed a $1 gain to open the final session of the week at $1,364.50 per ounce. After making a modest attempt at an advance to near the $1,370.00 level, bullion turned back into negative price territory within the first hour of trading. Gold ETF balances have fallen to an eight-month low on the back of clear-cut amelioration in the US jobs sector and the continuing Chinese central bank’s anti-inflation campaign. The yellow metal was still being hampered by the tangled news coming from Egypt and by the higher US dollar.
The latter gained 0.36 on the trade-weighted index (rising to 78.57), attracting safe-haven bids and benefiting from the wider, but lower than anticipated, US trade gap that was reported by the US Commerce Department for December. The US imported $40.6 billion more than it exported and ran a $497.8 billion trade deficit for the past year as a whole. More than half of that figure was accounted for by America’s deficit in trading with…China.