Last week was a terrible week for riskier assets.  Fears in the market about Greece’s fiscal situation continued to reek havoc on European bonds, currencies, commodities and the equity markets.  At one point, Greek 10 year yields moved up 51 basis points in less than one day, as investors preferred to shift their money out of the country’s government bonds.  Furthermore, the underlying fear that China is moving toward an interest rate tightening policy, continued to weigh on the equity markets, which pushed the S&P 500 down 18 points or 1.65% for the week.   Volatility also returned to the market.  The VIX volatility index reflected investor fear by rising from 22% to 28% by mid week.

Gold prices continue to be under pressure as the Dollar strengthens. The yellow metal started the week testing resistance at the $1100 level, but it headed south as the US currency rallied curbing the demand for metals as an alternative investment. Gold is currently being supported around $1075, but it’s hard to say that these supports could hold any longer if a new wave of selling pressure were to hit the market.  Gold traders will be closely watching the US GDP numbers and its effect on the Dollar as it seems clear that currencies are driving the price action of the metal. On a broader picture, recent cautious moves from China instructing banks to curb lending can be perceived as bearish for the Gold market. The opinion of billionaire investor George Soros about gold being “the ultimate bubble” is shared by many investors, suggesting that market’s sentiment could be anticipating further declines.

Tuesday January 26^th 2010, marked the preliminary quarterly GDP in the U.K.

It’s the broadest measure of economic activity and the primary gauge of the economy’s health.

The major stock indices presented a volatile session yesterday, as economic data and China’s new policy to restrain economic growth, weighed on investor’s sentiment. Even though stocks pushed higher at the start of the session, Financials pulled the market lower, sending the major indices into negative territory.