04-Sep (USAGOLD) — Gold has retreated into the range this morning after eking out a new 2-week high at 1678.42, but failing to clear Fibonacci resistance at 1681.68 (38.2% retracement of the decline from 1920.50 to 1534.06). The dollar and gold rose in tandem yesterday on safe-haven flows as global stocks tanked amid rising expectations that a Greek default is imminent. The dollar tacked on more gains today, after eurozone finance ministers meeting in Luxembourg indicated that the next tranche of bailout funds fore Greece were unlikely to be released before mid-November, but gold faltered intraday.

Greece had adamantly stated in the past that they would run out of money in mid-October, but miraculously Greek finance minister Venizelos now says they have adequate funding through mid-November. The markets are starting to doubt whether Greece will get that next tranche at all, which would unquestionably lead to default. Global stocks — particularly financial shares — are under pressure once again today.

Shares of French/Belgian bank Dexia plunged 38% intraday, due to the banks exposure to Greek bonds and the news that the additional €8 bln in aid for Greece would not be immediately forthcoming. Both France and Belgium quickly pledged support for Dexia, which in turn pushed up CDS premiums on the two sovereigns — Belgian CDS in particular were up markedly.

• US factory orders -0.2% in Aug, below market expectations of -0.1%; ex-transport -0.2%.
• Eurozone PPI -0.1% m/m in Aug, inside expectations of -0.2%, vs 0.5% in Jul; 5.9% y/y, down from Jul, but above expectations.
• UK CIPS Construction PMI fell to 50.1 in Sep, vs 52.6 in Aug.
• Indonesia trade balance (USD) jumped to $3.8 bln in Aug, vs $1.2 bln in Jul.
• Thailand CPI fell to 4.0% y/y in Sep, vs 4.3% in Aug.
• South Korea CPI fell to 4.5% y/y in Sep, vs 5.3% in Aug.
• Australia balance on goods and services jumped to A$3.10 bln in Aug, well above market expectations of A$1.9 bln, vs A$1.81 bln in Jul.
• RBA holds official cash rate steady at 4.75%, in-line with expectations.