Gold Scores Gain to Start Week ahead of Fed Rate Decision

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Gold futures settled higher Monday to recoup some of what they lost in the previous session, as investors set their sights on the crucial Federal Reserve decision on interest rates due out later this week.

As far as the Federal Reserve is concerned, if the central bank sends out a dovish signal on Thursday, this may help to boost stocks and undermine the dollar. Gold may benefit as lower rates for longer would decrease the relative opportunity cost for holding the metal,” said Fawad Razaqzada, analyst at Forex.com, in a Monday research note.

Investors appear divided on the likelihood of a rate increase the first since 2006 but gold is finding some support from traders who view the probability of the Fed ending its ultraloose monetary policy this month as low.

Low rates are beneficial to gold, which doesn't bear interest. Looser monetary policy for longer may keep the value of the dollar in check, offering dollar-denominated gold buyers reason to be bullish because a weaker buck makes the metal less expensive to buyers in other currencies.

Against this backdrop, gold for December delivery added $4.40, or 0.4%, to settle at $1,107.70 an ounce on Comex, after capping its third straight weekly loss Friday. Prices lost 0.5% in the previous session.

In other metals, December silver fell 14.2 cents, or 1%, to $14.363 an ounce. High-grade copper for December delivery lost 4.8 cents, or 2%, to end at $2.406 a pound.

October platinum settled down $9.50 cents, or 1%, to $955.40 an ounce, while December palladium lost $3.20, or 0.5%, to $587.80 an ounce.

Source : MarketWatch

Dollar Weakens for 2nd Day on Fed Interest-Rate Move Doubt

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The dollar weakened past 120 per yen amid speculation the Federal Reserve will refrain from increasing its benchmark interest rate this week.

A gauge of the greenback reached a two-week low before the Federal Open Market Committee’s rate-setting meeting Sept. 16-17. U.S. consumer prices fell in August from a month earlier, according to economists’ estimates before data due Sept. 16. The yen strengthened as all except two of 35 analysts surveyed by Bloomberg predicted the Bank of Japan will maintain its policy stance at its meeting Tuesday.

The greenback fell 0.3 percent to 120.23 yen at 5 p.m New York time, after reaching as low as 119.85. The Japanese currency appreciated 0.5 percent to 136.07 against the euro. The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.1 percent to 1,202.87 after reaching the weakest level since Sept. 1.

Source: Bloomberg

Asian Stocks Climb Before BOJ Decision as Consumer Shares Rally

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Asian stocks rose, with consumer shares leading gains, as investors awaited a Bank of Japan policy decision Tuesday ahead of the Federal Reserve’s meeting later this week.

The MSCI Asia Pacific Index advanced 0.2 percent to 127.53 as of 9:03 a.m. in Tokyo. Two of 35 economists expect extra monetary stimulus from Japan’s central bank, while traders put odds of the Fed raising borrowing costs at its Sept. 16-17 meeting at 28 percent.

Japan’s Topix index traded little changed. The BOJ will expand easing on Oct. 30, according to 11 economists in the Bloomberg survey taken from Sept. 7-10. Of the total respondents, 13 said they don’t expect any stimulus at all.

Australia’s S&P/ASX 200 Index climbed 0.1 percent. Former Cabinet minister Malcolm Turnbull, 60, became the nation’s prime minister late Monday after ousting Tony Abbott, 57, for the Liberal Party leadership. With an election due by next year the former Goldman Sachs Group Inc. executive must turn around the government’s poor ratings.

South Korea’s Kospi index was little changed and New Zealand’s NZX 50 Index rose 0.2 percent. Stocks in China and Hong Kong have yet to start trading, with futures on the Hang Seng Index sliding 0.6 percent.

The Shanghai Composite Index fell 2.7 percent on Monday, its steepest drop in almost three weeks, after data over the weekend added to concern China’s economic slowdown is deepening and as traders gauged the level of state support for equities.

E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying U.S. equity benchmark measure slid 0.4 percent on Monday.

Source : Bloomberg

Japanese Shares Advance as Investors Await BOJ Policy Decision

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Japanese shares rose before a central bank decision on whether to add to record monetary easing, as precision-instrument makers and insurance companies led gains.

The Topix index added 0.5 percent to 1,469.11 as of 9:01 a.m. in Tokyo. The measure slid 1.2 percent on Monday as Chinese equities declined. The Nikkei 225 Stock Average climbed 0.6 percent today to 18,074.76, while the yen weakened 0.1 percent to 120.36 per dollar, halting two days of gains. Investors are focusing on the outcome of the Bank of Japan’s two-day meeting before turning their attention to the Federal Reserve later in the week. The U.S. central bank decides on Thursday whether to raise interest rates for the first time since 2006.

Thirty-three of 35 economists project the BOJ will maintain the current pace of monetary stimulus, while two forecast an expansion. More than a third see the central bank adding to current easing by the end of next month. Inflation in July slowed to zero for the third time this year, increasing pressure on Governor Haruhiko Kuroda. He said in August that the BOJ could meet its 2 percent price target with the current level of stimulus.

China’s stocks fell the most in three weeks on Monday, with the Shanghai Composite Index retreating 2.7 percent after data over the weekend added to concern the economic slowdown is deepening and traders gauged the level of state support for equities.

E-mini futures on the Standard & Poor’s 500 Index advanced 0.1 percent on Tuesday. The underlying equity measure slid 0.4 percent in New York on Monday, with Yahoo Inc. and Alibaba Group Holding Ltd. dropping at least 3.1 percent.

With two days to go until the Fed’s statement, interest-rate futures put the odds of a hike this week at 28 percent, down from more than 50 percent before China roiled markets with its surprise currency devaluation.

Source : Bloomberg

U.S. Stocks Fall Amid Focus on Fed Rate Decision This Week

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U.S. stocks declined, following equities’ best week since July, before the Federal Reserve decides on Thursday whether the economy and turbulent financial markets can handle higher interest rates.

The Standard & Poor’s 500 Index slipped 0.4 percent to 1,953.02 at 4 p.m. in New York, after the gauge rose 2.1 percent last week. Trading in S&P 500 companies was about 26 percent below the 30-day average for this time of day amid the Jewish new-year holiday.

Investors remain confident the Fed will raise borrowing costs this year, even as most bet the central bank will not increase rates at its Sept. 16-17 meeting. Traders are pricing in a 26 percent chance of action on Thursday, down from 48 percent before China’s currency devaluation last month. Odds of a move at the December gathering are about 59 percent, according to data compiled by Bloomberg.

Chinese stocks slumped the most in three weeks after data added to concern that the country’s economic slowdown is deepening. Industrial output missed economists’ forecasts, while investment in the first eight months increased at the slowest pace since 2000.

Market swings and rapid shifts in investor sentiment have become more prevalent as uncertainty on the impact of China’s slowdown coupled with the Fed’s looming rate decision to whipsaw equities. For the ninth time in a row, the S&P 500 posted a weekly return that amounted to a reversal of the prior week’s performance. Such a streak of alternating gains and losses has happened only three times in 20 years, according to data compiled by Bloomberg.

Souce: Bloomberg