Analysis

	World Financial Market Summary for January 2nd - 15th, 2008.

In the first weeks of January the fall of the dollar against the Euro, yen, Swiss franc and gold continued. This makes investments in US debt securities less and less promising, which, in its turn, can lead to withdrawal of capital from the United States, thus exacerbating the recession.
The price of a troy ounce of gold has already exceeded 914 dollars. The growth within the first two weeks of the year amounted to nearly 10%. The price of 1,000 dollars per ounce is not far and this is a possible mid-term scenario. Such trends are usually accompanied with corrections, and apparently the fall is quite close. Purchases will happen starting from 880 and 850 dollars per ounce.
Silver is catching up with gold in terms of value growth and has already been traded above 16.60 dollars per ounce. In the mid-term perspective the growth is restricted by 16.80 and 18.50 dollars per ounce. The lower support is at 14.70.
Crude oil went up in price to 100 dollars per barrel but the sellers lowered the price to 90 dollars.
Since the beginning of the year the Dow Jones Index has declined dramatically and is now ready to break through 12,500 points. Stocks on major exchanges of developing countries are also being traded in the red.  One of the rare exceptions (so far) is the Russian stock market.
The banking sector shares are experiencing increased sales pressure. Citi Group lost over 7% within one trading session. In addition to the write-offs associated with its investment in subprime mortgages, the bank is suffering losses from consumer lending. The total write-off sum has exceeded 22 million dollars. The Bank announced additional cash infusion of 14.5 billion dollars from third party investors.

In late January the USA FRB will take a decision on the rates. The market is considering several options – even the reduction by 0.75%. It is rumored that the rate may be lowered even earlier, at an extraordinary meeting of the Open Markets Committee. 
The US economic problems are beginning to affect all spheres of the global economy. The rate reduction is not a universal solution to these problems. Moreover, it may result in greater economic problems.