FX.co ★ Fundamental Analysis, March 02, 2011

Index rises have been recorded this morning at Asia's stock markets for the first time in four days, after the price of crude oil rose over 100 United States dollars for one barrel due to concerns that the unrest in North African and Middle Eastern countries would lead to another disruption of the oil supply.

Crude oil futures for April rose by 0.5% to the level of 100.1 United States dollars for one barrel during electronic trading at the New York Commodities exchange.

In the macroeconomic arena, the ISM reported yesterday that manufacturing-sector activities in the United States rose this morning to a level of 61.4 points – its highest level since May 2004, compared to 60.8 points last month. The economists' prediction was for a more moderate increase in the index to a level of 61 points.

Furthermore, the United States Department of Commerce reported yesterday that the construction expenditures in the United States declined in January by 0.7% after a 1.6% decline in December. Economists had predicted a more moderate decline of 0.4%.

Gold, considered a safe haven for investors in times of crisis, closed at an all-time high on the background of concerns over the spreading of the uprisings in the Middle East to additional countries, as well as concerns over increasing inflationary pressure after the address made by Ben Bernanke, the chairman of the Federal Reserve. Gold futures for April closed at 1431.2 United States dollars for one ounce of gold, a 1.5% rise at the New York Commodities Exchange. Since the Federal Reserve reduced the U.S. Interest rate to near-zero levels in late 2008 due to the global financial crisis, the price of gold leaped up by 70%, having reached a new high of 1,435 United States dollars for one ounce yesterday.

We note further that silver futures for May have closed yesterday on a 1.8% climb to a level of 34.50 United States dollars for one ounce – a 31-year high.