East Airlines Finance: US Loses 3A Rating, Gold Futures Surge - Commodity Futures Account Opening

by donghang0728 on 2011-08-08 16:18:24

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Last Friday, the internationally renowned rating agency Standard & Poor's announced a downgrade of the US credit rating. According to S&P Executive Director and Chairman of the Sovereign Credit Rating Committee, Chambers, the main reason for this downgrade is that although the two parties in the US Congress have reached an agreement on raising the debt ceiling and cutting fiscal deficits, they still have differences on how to implement it, which could render the bill ineffective. Additionally, as part of the economy, the development trajectory of US debt and the obvious lack of willingness among officials to correct the benchmark as a whole have not changed the key factors negatively affecting the maintenance of the US 3A rating. In S&P's sovereign credit ratings, the US is currently the only G8 member to have slipped from a 3A rating.

As S&P's downgrade of the US credit rating disrupted financial markets, European and Asia-Pacific stock markets plummeted across the board, with non-ferrous metals and crude oil prices falling. Driven by risk aversion, gold prices surged to a record high of $1697 this morning. The Shanghai Gold Futures saw a rise of over 2%, also hitting a record high.

According to Song Lu, analyst at Dongwu Futures, in the short term, systemic risks are arriving, making any technical support level appear quite fragile. The market has entered a phase of taking one step at a time. The publication of China's economic data this week may become another risk point for the market, especially with the expectation of interest rate hikes. Meanwhile, as S&P has already downgraded the US credit rating, whether the other two major credit rating agencies will also make corresponding downgrades remains unknown. We want to emphasize that during the process of economic slowdown in both China and the US, unexpected risk points will continue to emerge.

In contrast to the trend of gold futures is the price of crude oil. International crude oil prices plunged sharply today. As of 12:31 Beijing time, the September delivery light crude oil futures price on the New York Mercantile Exchange was quoted at $83.69 per barrel, down $3.19 from last Friday's closing price of $86.88 per barrel, a drop of 3.67%.

Overall, with the continuous deterioration of the Eurozone debt crisis and the downgrade of the US sovereign rating, global stock markets face the danger of collapse. This makes the trends of gold futures and international crude oil prices more subtle. Crude oil may continue to maintain a downward trend.

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