Gold Prices End Lower as Fed Meeting Looms, U.S. Stocks Rally

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Gold futures settled Tuesday with a modest decline as investors turned their attention to a rally in the U.S. stock market ahead of the Federal Reserve’s monetary-policy meeting next week.

The meeting may determine the direction of the dollar and dollar-denominated commodities like gold.

Demand from Asian buyers helped keep a cap on any losses for gold with recent data showing that China bought 16 tons of the yellow metal in August, after purchasing 19 tons in July. The U.S. dollar also weakened a bit Tuesday, giving dollar-denominated gold prices some added support.

Still, gold for December delivery edged down by 40 cents to settle at $1,121 an ounce on Comex, after trading between a low of $1,114.70 and a high of $1,126.

On Monday, there was no settlement for Comex gold because of the Labor Day holiday. Prices ended last week with a loss of more than 1%, pressured by expectations that the Fed may raise interest rates for the first time since 2006. The central bank’s next two-day monetary-policy meeting begins on Sept. 16.

A rate increase would be a boon for the dollar but commodities like gold, which is sold in dollars, would be more expensive to buyers in other currencies.

In other metals, December silver rose 20.6 cents, or 1.4%, to $14.755 an ounce. High-grade December copper settled up 12.2 cents, or 5.3%, at $2.434 a pound, rebounding after last week’s decline of around 1.5%.

Source: MarketWatch

Fed Should Wait with Raising Rates: World Bank Economist

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The U.S. Federal Reserve should hold off on raising interest rates until the global economy is more stable, the World Bank's chief economist said in an interview with the Financial Times published on Tuesday.

“I don’t think the Fed lift-off itself is going to create a major crisis but it will cause some immediate turbulence,” Kaushik Basu was quoted as saying.

“The world economy is looking so troubled that if the U.S. goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly,” he said.

Source: Reuters

U.S. Stocks Follow Gains in Global Equity Markets After Labor Day

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U.S. stocks surged, with the Standard & Poor’s 500 Index’s second-best gain this year, after a late rally in Chinese stock markets led global equities higher.

The S&P 500 jumped 2.5 percent to 1,969.28 at 4 p.m. in New York, after the gauge’s second-biggest weekly retreat this year.

Equities around the world climbed today, led by China. A rally in Shanghai in the final hour of trading followed a pattern that has recently suggested state intervention to prop up the nation’s equities. U.S. stocks have turned more volatile in recent weeks amid concerns that a Chinese economic slowdown will weigh on global growth, while investors bet the Federal Reserve is on course this year for its first interest-rate increase since 2006.

The S&P 500 swung up or down an average of 2 percent a day for more than two weeks through Friday, while before Aug. 20, the 2015 average was around 0.6 percent. In 10 of the last 13 days, the benchmark has closed with a move of at least 1.3 percent. The Chicago Board Options Exchange Volatility Index had posted 11 straight sessions above 25, a level that before August it touched on just five days since 2011.

Investors remain confident the Fed will raise borrowing costs this year, even as they pare bets on policy makers deciding to do so at a meeting next week. Traders are pricing in a 30 percent chance the central bank will increase rates at this month’s gathering, down from 48 percent before China’s currency devaluation on Aug. 11. Odds of a move at the December meeting are 59 percent, according to data compiled by Bloomberg.

All of the S&P 500’s 10 main industries climbed at least 1.3 percent Tuesday, with industrial, raw-material, health-care and technology companies rising the most, up more than 2.4 percent.

Source: Bloomberg

U.S. Stocks Follow Gains in Global Equity Markets After Day Off

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U.S. stocks rose, following the Standard & Poor’s 500 Index’s second-biggest weekly retreat this year, after a late rally in Chinese stock markets led global equities higher.

Apple Inc., Amazon.com Inc., Wells Fargo & Co. and General Motors Co. all posted gains of at least 2.1 percent amid a broad-based rally as investors returned from the Labor Day holiday. Teco Energy Inc. surged 24 percent to a 13-year high after agreeing Friday to a $6.5 billion buyout by Canada’s Emera Inc. Meredith Corp. added 10 percent after Media General Inc. agreed to buy the company in an acquisition valued at about $2.4 billion.

The S&P 500 jumped 1.8 percent to 1,955.83 at 12:26 p.m. in New York, after sliding 1.5 percent on Friday. The Dow Jones Industrial Average rallied 301.25 points, or 1.9 percent, to 16,403.63. The Nasdaq Composite Index advanced 2 percent.

Equities around the world climbed today, led by China. A rally in Shanghai in the final hour of trading followed a pattern that has recently suggested state intervention to prop up the nation’s equities. U.S. stocks have turned more volatile in recent weeks amid concerns that a Chinese economic slowdown will weigh on global growth, while investors bet the Federal Reserve is on course this year for its first interest-rate increase since 2006.

Source: Bloomberg

Europe Stocks Climb Second Day on China Support, Led by Autos

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European shares posted a broad-based rally as China led gains in global equities amid speculation that state support will limit its market turmoil.

All 19 industry groups on the Stoxx Europe 600 Index rose, with carmakers and miners leading the advance. Daimler AG, BMW AG and Volkswagen AG rose at least 2.5 percent. Commerzbank AG increased 6.8 percent after JPMorgan raised the German lender to overweight, similar to buy, from neutral, and added it to its list of top picks among European banks. Amlin Plc soared 33 percent after MS&AD Insurance Group Holdings Inc. agreed to buy the Lloyd’s of London insurer. Rio Tinto Group contributed the most to gains in a gauge of miners, rising 2.6 percent after giving a bullish assessment of China’s steel and copper demand.

The Stoxx Europe 600 Index advanced 1.2 percent to 359 at the close of trading, after earlier rising as much as 2.3 percent. Shares rebounded Monday from the previous week’s decline, with miners leading gains, helped by reassurances from China’s central bank governor that stability would return to markets. Chinese stocks rallied Tuesday for the first time in five days on speculation state-backed funds bought shares after a weak trade report.

Investors are also awaiting next week’s Federal Reserve meeting on interest rates. Traders are pricing in a 28 percent chance that officials will raise borrowing costs at the September gathering, down from almost even odds before China’s currency devaluation Aug. 11.

A report showing the euro-area economy grew more than forecast in the second quarter also buoyed sentiment today.

Source: Bloomberg