Gold Rebound on Dolar, Fed Minute Show Uncertainty

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Gold rose on Wednesday as the dollar softened, reversing after touching a four-month low as markets watched the tumble in Chinese stock markets and the unfolding Greek debt crisis.

The price of the yellow metal did not react to the June U.S. Federal Reserve policy meeting minutes that showed officials saying they needed to see more signs of a strengthening U.S. economy before raising interest rates.

Melek was referring to expectations the Fed will raise interest rates later this year.

San Francisco Fed President John Williams said the Fed will likely raise rates this year but should only do so when there are firmer signs inflation is headed back up toward the central bank's 2 percent target.

Spot gold was up 0.6 percent at $1,161.60 an ounce at 2:54 p.m. EDT (1854 GMT), after falling to $1,146.75, its lowest since March 18, in earlier trade. U.S. gold futures for August delivery settled up $10.9 at $1,163.50 an ounce.

Other precious metals fell sharply early, with platinum approaching the $1,000 an ounce mark for the first time in more than six years before paring losses.

Source : Reuters

Yen Rises as China Stock Slide Fuels Haven Demand; Euro Gains

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The yen strengthened as a stock rout in China spurred demand for haven assets amid a slump in commodity currencies.

Japan’s currency gained versus all of its 16 major peers. It advanced for a fifth day against the U.S. dollar, the longest winning streak since April, amid concern the turmoil in China will spread and slow global economic growth. The euro climbed by the most in three weeks amid speculation that Greece will reach an agreement with creditors this weekend.

The yen appreciated 1.6 percent to 120.64 per dollar at 12:17 p.m. New York time, extending its five-day gain to 2.1 percent. Japan’s currency strengthened 1 percent to 133.52 per euro. The euro rose 0.5 percent to $1.1067.

China’s Shanghai Composite Index tumbled as much as 8.2 percent, the most since 2007. A raft of measures by authorities to stabilize the market has so far failed to stop the slide as traders unwind margin bets at a record pace.

Source: Bloomberg

Asian Stocks Decline, Extending 5-Month Low on China Shares Rout

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Asian stocks slid, with the regional benchmark index extending a five-month low, amid concern that China equities rout will depress growth in the world’s second-largest economy.

The MSCI Asia Pacific Index declined 0.4 percent to 139.13 as of 9:01 a.m. in Tokyo. China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, its latest effort to stem an equities decline that’s erased more than $3 trillion of value. It’s a sign of desperation and will fuel fear among investors, said Mark Mobius, executive chairman of the Templeton Emerging Markets Group.

China Shanghai Composite Index sank 5.9 percent to close at a three-month low on Wednesday as another round of government support measures failed to allay concern that investors who borrowed to buy shares will keep unwinding those trades at a record pace. The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong dropped 6.1 percent while the benchmark Hang Seng Index posted its biggest decline since the global financial crisis.

Chinese inflation data is due Thursday, with sellers locked out of 72 percent of the market amid trading suspensions. The Federal Reserve registered concern over China as early as last month, with meeting minutes signaling potential risks to the U.S. from there and Greece.

Source : Bloomberg

Japanese Stocks Plunge as Yen Jumps Amid Flight to Safest Assets

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Japanese stocks plunged after the yen strengthened as investors sought haven assets amid a Federal Reserve warning that China’s equity rout and the Greek debt crisis could damp economic growth.

The Topix index lost 1.8 percent to 1,554.19 as of 9:01 a.m. in Tokyo, with all of its 33 industry groups declining. The Nikkei 225 Stock Average dropped 1.6 percent to 19,416.19. The yen advanced against all 16 of its major peers Wednesday, surging more than 2 percent versus currencies from the pound to the Brazilian real amid demand for the safest assets. It traded at 120.86 per dollar, maintaining a 1.5 percent gain.

E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent after the underlying measure tumbled 1.7 percent to a four-month low in disrupted trading in New York on Wednesday.

Trading was suspended on the New York Stock Exchange as a computer malfunction shut the venue for 3 1/2 hours. Stocks continued to change hands on other U.S. venues.

Fed officials expressed concern over risks posed by China and Greece, according to the record of their last meeting. Almost all policy makers said they still need more evidence growth is strong as they mull the timeline for raising interest rates. Investors sought out haven plays amid speculation the selloff that has wiped out more than $3 trillion in Chinese equity value and paralyzed the market could spread to the economy. Greece extended its bank shutdown through Monday.

Source : Bloomberg

U.S. Stocks Tumble as China Equities Rout Spurs Growth Concern

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The Standard & Poor’s 500 Index fell to a four-month low amid concern that China’s equities rout will hurt growth in the world’s second-largest economy, and Federal Reserve minutes indicated officials acknowledged the potential risks from overseas crises.

The S&P 500 fell 1.7 percent to 2,046.88 at 4 p.m. in New York, its lowest close since March 11.

Members of the Federal Open Market Committee “mentioned their uncertainty about whether Greece and its official creditors would reach an agreement and about the likely pace of economic growth abroad, particularly China and other emerging market economies,” according minutes of June 16-17 meeting.

Fed officials in June forecast they would raise rates twice this year, while lowering their outlook for subsequent increases. Since then, global markets have been shaken by the rising risk of a Greek exit from the euro and a rout in Chinese stocks.

China’s market plunge has raised concerns about a broader impact on global economic growth. The country has unveiled new market-boosting measures almost every night over the past 10 days as policy makers seek to maintain confidence in the nation’s leadership and prevent a crash from weighing on economic expansion.

President Xi Jinping’s government is ramping up efforts to combat the rout as policy makers seek to maintain confidence in the nation’s leadership and prevent a crash from weighing on the weakest economic expansion since 1990.

Source : Bloomberg