By Rakesh Neelakandan
Which commodity would be the worst casualty if Greece defaults?
Which commodity would be the worst casualty if Greece defaults?
“Industrial metals”, pat came the reply from Bitupen Majumdar, commodity analyst with JRG. Manufacturing activities in Europe and China may get affected on Greece default, he added.
Gold & Silver
“Gold would witness further slide in the event of Greek default as the downtrend in other commodities would prompt investors to liquidate positions in gold.” He added. “And Silver may reach $25/oz in 1.5-2 months”, he said.
Rupee slide
Greece default would also mean a temporary surge in dollar demand, according to Martin Patrick, a Kochi based economist.
“This means a further slide in rupee and strengthening of dollar.” Martin said.
When dollar climbs, commodities generally fall.
Psychological effect
Greece default may also stifle interbank lending process as well, Martin said.
“It would have more of psychological effect, than economic”, he added.
And that could worsen the rout in commodities.
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