Gold Prices Cap Longest Slump in Five Weeks on Fed Rate Outlook

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Gold futures posted the longest slump in five weeks on concern that the Federal Reserve is moving closer to raising U.S. interest rates, crimping demand for the precious metal as an alternative investment.

In the third quarter, gold fell 8.4 percent as the U.S. economy gained. The Fed begins a two-day meeting tomorrow and policy makers will debate the pace of raising borrowing costs after holding its benchmark rate close to zero percent since 2008.

Last month, gold dropped to a four-year low as equities surged to a record and oil prices entered a bear market. Jeffrey Currie, head of commodity research at Goldman Sachs Group Inc, said last week that the metal will drop as the U.S. economy improves. Economists and Fed officials surveyed by Bloomberg expect higher rates in 2015.

Gold futures for February delivery fell 1.2 percent to close at $1,207.70 an ounce at 1:46 p.m. on the Comex in New York. The price capped a fourth straight decline, the longest slump since Nov. 6.

Source : Bloomberg

Oil Falls as UAE Says OPEC Won’t Cut Output to Bolster Price

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Crude oil dropped to a five-year low after the United Arab Emirates said OPEC wont rein in production in response to the slump.

The Organization of Petroleum Exporting Countries will refrain from curbing output even if prices fall as low as $40 a barrel, U.A.E. Energy Minister Suhail Al-Mazrouei said. Prices have fallen about 20 percent to the lowest in five years since OPEC decided against cutting production to tackle the glut at a Nov. 27 meeting. The group has pumped more than its output target of 30 million barrels a day for the last six months.

Oil fell into a bear market this year amid the highest U.S. production in three decades and slowing growth in global consumption. Futures rebounded earlier today on signs that output will decrease in Libya and Nigeria, which are responsible for about 9 percent of OPEC production.

West Texas Intermediate for January delivery declined 84 cents, or 1.5 percent, to $56.97 a barrel at 10:25 a.m. on the New York Mercantile Exchange. Futures touched $56.25 earlier, the lowest level since May 2009. Total volume was 67 percent above the 100-day average for the time of day.

Brent for January settlement slipped 23 cents to $61.62 a barrel on the London-based ICE Futures Europe exchange. The North Sea crude earlier slumped to $60.28, the least since July 2009. Volume was near the 100-day average. The European benchmark traded at $4.67 a barrel premium to WTI.

Source: Bloomberg

Asian Stocks Extend Eight-Week Low as Oil Slump Hurts Sentiment

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Asian stocks fell, with the regional benchmark gauge extending an eight-week low, as the slump in oil raised concern about the global economy and a stronger yen weighed on Japanese equities.

The MSCI Asia Pacific Index dropped 0.3 percent to 135.24 as of 9:01 a.m. in Tokyo after closing at its lowest level since Oct. 17 yesterday. The Standard & Poors 500 Index declined 0.6 percent as the selloff in crude overshadowed a surge in industrial production. The yen gained 0.8 percent against the dollar. The Federal Reserve starts a two-day meeting today, with investors watching for whether the central bank will push back the timeline for raising interest rates.

Crude oil dropped to the lowest level in more than five years after the United Arab Emirates said OPEC wont rein in production in response to the slump. West Texas Intermediate for January delivery declined $1.90, or 3.3 percent, to $55.91 a barrel yesterday on the New York Mercantile Exchange, the lowest settlement since May 2009. It extended declines to $55.67 per barrel today.

Japans Topix index sank 1.2 percent as the yen maintained yesterdays advance, trading at 117.85 per dollar. South Koreas Kospi index and Australias S&P/ASX 200 Index lost 0.7 percent. New Zealands NZX 50 Index slipped 0.2 percent.

Source: Bloomberg

Japan Stocks Fall Second Day as Yen Gains Amid Crude Oil Selloff

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Japanese stocks slumped for a second day after the yen strengthened as investors sought haven assets amid a continuing selloff in crude oil.

The Topix slipped 1.2 percent to 1,363.46 at 9:01 a.m. in Tokyo, after closing yesterday at a one-month low. All of the 33 Topix industry groups retreated. The Nikkei 225 decreased 1.4 percent to 16,864.28. The yen traded at 117.87 per dollar after advancing 0.8 percent yesterday. Stocks also fell in the U.S. and Europe.

Futures on the Standard & Poors 500 Index added 0.2 percent today. The underlying U.S. equity measure dropped 0.6 percent yesterday to its fifth loss in six sessions. The Stoxx Europe 600 Index slid 2.2 percent to the lowest level since Oct. 20. The Federal Reserve starts a meeting today on monetary policy and the timeline for raising U.S. benchmark borrowing costs.

Benchmark oil prices capped a fifth day of declines, slipping to five-year lows after the United Arab Emirates said OPEC wont cut output.

The Bank of Russia raised its key rate to 17 percent from 10.5 percent as the slump in crude pushes the country, the worlds biggest energy exporter, toward a recession.

Source : Bloomberg

U.S. Stocks Retreat as Oil Drop Overshadows Deals, Factory Data

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U.S. stocks retreated, sending the Standard & Poors 500 Index to its fifth drop in six sessions, as the continuing selloff in oil overshadowed a surge in industrial production and corporate deals.

The S&P 500 fell 0.6 percent to 1,989.43 at 4 p.m. in New York, falling below its average price for the past 50 days. The gauge lost as much as 1 percent today, slipping below its 100-day moving average before paring the decline. It has lost 4.1 percent since closing at a record on Dec. 5.

The Dow Jones Industrial Average dropped 105 points today, or 0.6 percent, to 17,175.83. The measure plunged 3.8 percent last week, the biggest drop since November 2011.

The S&P 500 erased an early advance of 0.8 percent today as crude dropped. The benchmark stocks index then fell as much as 1 percent by midday before paring losses. The gauge lost 3.5 percent last week as crude plunged to a five-year low.

More than $1.8 trillion was erased from the value of global equities last week as oil prices tumbled on signs of weakening demand, raising concern over the strength of the global economy.

Source : Bloomberg