Markets adopt wait-and-see approach to Syria


The December U.S. Dollar Index (NYBOT:DXZ13) closed at 82.375 on Friday, up 13.2 points tied to concerns over the Syria situation and the possibility of a U.S. strike against various positions. The introduction of chemical weapons used on civilians lead to the possibility of a U.S. attack. However, late Friday, President Obama changed "his mind" and decided to place the responsibility on Congress as to the determination of any strike against Syria. This entire matter has developed into a sign of weakness for the U.S. by friends and foes alike. The President had "jumped the gun" in declaring he would give the order to attack Syrian government elements before the evidence of who is responsible for the use of those weapons could be determined. Now the "urgency" no longer exists but has left not only his cabinet members but the entire world wondering if, as Teddy Roosevelt once said, "Speak softly and carry a big stick" has changed to "speak loudly, and don’t carry any stick". A bad situation made worse by the "rhetoric" and change of direction. The Syrian situation supersedes any concern in the marketplace over the possibility that Greece may need another bailout, or of the debt crisis in Europe nor of the U.S. economic situation. Other currencies affected by the geopolitical implications were the Euro, which lost 33 points to $1.3215, the Swiss Franc which gained 7 ticks to $1.0760, the Japanese yen up 15 ticks to 0.010198, and the Canadian dollar up 6 ticks to 94.77c.

The British Pound lost 5 points to $1.5481, and the Australian lost 30 points to 88.42c. We prefer the sidelines for now.


October crude oil (NYMEX:CLV13) closed at $107.65 per barrel, down $1.15 on Friday on profittaking after its recent rise tied to concerns over Egypt and Syria. The market responded negatively to the British decision not to back the U.S. in any attack on Syrian government positions. An attack could have expanded in the region and cut supplies of crude from the area. With the added change in U.S. Presidential policy as to whether Congressional approval would be given, the market remains in flux and we remain on the sidelines.


December copper closed at $3.2350, down 2.55c and remains rangebound tied to any changes in U.S. economic data and corporate results. Producer concerns also was a factor in recent strength. We prefer the sidelines after having been bearish for some time.

Precious Metals:

December gold (COMEX:GCZ13) closed Friday at $1,396.10 per ounce, down $16.80 or 1.2% but managed a gain of 6.3% for the month. Increased physical demand recently as well as concerns over the Egyptian and Syria situation prompted the return to golds attraction. Shortcovering in front of the holiday weekend also a factor in Fridays action. We remain unconvinced as to the viability of gold as an "investment". Any inclination to own a precious metal should be directed, in our opinion, to silver, which has proven to provide a more attractive percentage gain I any upward price movement. December silver closed at $23.51 per ounce, down 63c on pre weekend profittaking after recent gains. We prefer silver to gold only for those who "must have" a precious metal in their portfolio. Otherwise we prefer the sidelines. The wide price swings tied to any economic or geopolitical data is not suggested for retail clients. October platinum closed at $1,527.10 per ounce, up $4.70 while December palladium closed at $723.85 per ounce, down $16.25. We are on the sidelines here as well.

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