US sub-prime mortgage problems prompted investors to dump emerging market bonds, stocks and currencies in favor of safe-haven government bonds (the US ten-year note fell 5 basis points to 4.67%). Fears of a global liquidity crisis curbing economic growth knocked down also industrial metals, gold and oil on this week. Gold’s status as a safe haven in times of economic and political uncertainty was not enough to save it from sell-off. Gold prices had their steepest fall and silver prices also dropped as plunging equity markets prompted investors to sell precious metals to raise cash.Spot gold was tumbling from $670 an ounce to $ 641. Prices could be under $ 650 if the turbulent was to keep going. Silver had fallen from $12,80 to $11,10.

Investors concentrated on the credit market troubles and moved for the relative safety of the low-yielding Japanese currency. The unwinding of Carry Trades caused the Yen to soar the parity($/JPY) to 112,5. The US Dollar held steady against the European currencies. Euro had fallen from 1,37 to 1,3390.

A threat of storm damage to US Gulf refineries receding, coupled with credit worries, sent oil prices more than $1 lower.US crude fell $1.09 or 1.5 percent to $72.25 a barrel .London Brent crude was down $1.43 at $70.21. Prices could be dropping due to investor worries that demand could decline if equities markets continue to fall (investors might sell oil futures to cover losses in equity markets) and growth in the economy slows.