The weaker Dollar helped boost April Gold. Some traders believe that the gold market overreacted to the downside last week and may have set up an oversold condition. A successful test of a retracement level at $1049.60 also gave Gold a boost into the close. Furthermore, growing deficits in most major economies is renewing talk of a major developing inflationary situation. Some gold investors believe that central banks will be forced to print money to cover their deficits. This will weaken paper money, making hard assets more valuable.

U.S. equity markets finished lower on Monday. Today’s trade was choppy and indecisive as investors seemed to be looking for permission to rally. The lack of a catalyst to instill confidence in bullish traders held back the major buyers today. Traders are hoping for more concrete evidence that a resolution has been reached regarding the sovereign debt situation in the Euro Region.

Appetite for risk is likely to return once the situation in Greece stabilizes and the Euro begins to rally. Optimism that a viable solution could be reached to assure investors that Greece would adhere to its budget, should help to drive up investor confidence. It looks as if this week will be choppy until investors decide whether to embrace risk or repel it.

March Treasury Bonds closed lower on Monday. The daylong weakness was being triggered by a combination of falling demand for lower risk assets and the new supply of debt which is ready to come to the market courtesy of the U.S. Treasury. Overnight support held this morning at a 50% level at 118’24. A failure to hold this level is likely to trigger an acceleration to the downside. Look for resistance at 119’24.

The weaker Dollar and increased demand for higher risk which helped support March Crude Oil throughout the day. The supply and demand situation remains bleak so this market will be more sensitive to currency movement. Look for a surge to the upside if the Dollar weakens this week.

The U.S. Dollar finished mixed in a day highlighted by volatility and indecision. Traders could not make up their minds after news regarding the fiscal problems in Greece failed to instill confidence to the markets. Some traders feel that a resolution will be reached which may involve aid or stronger assurances that Greece will strictly follow its newly proposed budget. Others feel the Dollar is taking a breather before the next leg up.

The March Euro traded all over the intraday charts while experiencing a choppy two-sided trade early during the session. Volatility and indecision could be the theme today as traders are unlikely to make up their minds about reversing this market to the upside until a resolution is reached regarding the sovereign debt issues in the Euro Region. Continue to look for volatility, highlighted by directionless trading until the European Central Bank, European Union or International Monetary Fund offers a viable solution to Greece’s fiscal problems.

Volatility and choppiness also affected the British Pound. Besides the weak economy, investors had to deal with the possibility that the U.K. will suffer the same fate as Portugal, Spain and Greece and have its debt rating reduced because of its huge budget deficit. Furthermore, news that the June election could result in neither party receiving a majority also hurt the British Pound.

The March Japanese Yen was little changed at the finish. Today’s trading range was the smallest of the year and was inside Friday’s range. This pattern suggests impending volatility. This market could shift quickly to the upside if risk aversion returns to the markets. Budget problems in Europe, the U.K. and the United States may encourage traders to seek the safety of the lower yielding Asian currencies.

The March Swiss Franc finished lower and inside of Friday’s range. The current trade is being determined by the movement in the Euro. A weaker Euro will increase the chances of a Swiss Bank intervention, thereby strengthening the Dollar versus the Swiss Franc. A short-covering rally in the Euro will support the Swiss Franc.

Dovish comments from Bank of Canada deputy governor Duguay helped drive the March Canadian Dollar lower. On Monday, he reiterated that interest rates will hold steady until at least the end of the second quarter. Furthermore, he emphasized that a weaker Canadian Dollar scenario is necessary to keep the economic recovery on course. Stronger gold and crude oil should have helped to rally the Canadian Dollar but it looks as if weaker equity markets exerted a larger influence on this currency pair.