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With equities in freefall, gold shines

Heading into Friday's close, the FTSE 100 is down about 60 points on the day's trading, sitting just above the 6700 levels.

UK markets

Equities are in freefall as fears over Argentina’s stability have sent shockwaves throughout global markets. The collapse of the Argentine peso yesterday has prompted a flight to quality – simply put dealers are taking their money out of equities and putting it into safe haven assets like gold. Over in Turkey, it seems like a throwback to bad old days of currency wars, as political turbulence has pushed the lira to record lows. Elsewhere, the revelation that the HSBC Chinese manufacturing index has slipped into contraction territory is putting pressure on mineral extractors. While back at home, Mark Carney has been downplaying the possibility of an interest rate rise, but this has done little to quell investor fears, with banking stocks bearing the brunt of this news.

US markets

Apple earnings are set for release after the bell on Monday and with record revenue expected, the announcement will be of interest to both shareholders and non-shareholders alike. The company has barely been out of the headlines in recent days, with billionaire investor Carl Icahn signalling his belief in growth potential by increasing his stake in the past two weeks to $3 billion.

Commodities

Gold is powering ahead as fears of an Argentine default grips the markets and when the chips are down, investors will always turn to gold. Others misfortune tends to be beneficial to the yellow metal – the fortuitous timing of problems in equity and currency markets have seen gold’s allure increase. A close above $1268 would put the bias on the upside, completing an inverse head and shoulders pattern and signalling the possibility of a retest of the $1300 level. Above $1300, tougher tests will no doubt come for those hoping to see higher levels.

Forex markets

The Australian dollar has dropped to a three-and-a-half year low as poor Chinese manufacturing figures and comments from Australian central banker Heather Ridout weigh on the Aussie dollar. Sterling also fell off the back of BoE governor Mark Carney downplaying the likelihood of an interest rate increase in the near future.

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