Gold Fell Most This Month as Housing Data Boosts Rate Concerns

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Gold fell the most since April on speculation that an improving U.S. housing market will boost the case for the Federal Reserve to raise U.S. interest rates.

U.S. housing starts jumped to a seven-year high last month, government data showed Tuesday. The rise extended gains in the dollar, curbing bullion’s appeal as an alternative asset, after the European Central Bank said it will speed up bond buying. Gold has posted three straight monthly losses as the outlook for higher borrowing costs prompts investors to favor assets with better yield prospects, such as equities.

The metal dropped from a three-month high, with the rebound in housing signaling the economy may be strong enough for the Fed to start tightening this year. Minutes from the central bank’s latest meeting will be released Wednesday. Holdings in exchange-traded products backed by gold fell to the lowest since mid-January, data compiled by Bloomberg showed.

Gold futures for June delivery fell 1.7 percent to settle at $1,206.70 an ounce at 1:43 p.m. on the Comex in New York, the biggest drop for a most-active contract since April 30. On Monday, the precious metal climbed to $1,232, the highest since Feb. 17.

Source: Bloomberg

Euro Drops After ECB Official Pledges to Speed Up Bond Purchases

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The euro tumbled the most in two months after a European Central Bank official said policy makers plan to boost bond purchases before an anticipated mid-year lull.

The single currency slumped after Executive Board member Benoit Coeure said the ECB will increase purchases under its quantitative-easing program from 60 billion euros ($67 billion) in May and June, ahead of a drop-off in market liquidity. The euro extended losses versus the dollar after a report showed residential construction in the U.S. surged in April to the highest in more than seven years, supporting the Federal Reserve’s move toward raising interest rates.

The euro dropped 1.6 percent to $1.1138 as of 1:03 p.m. in New York, the most since March 19. It slipped 1 percent to 134.36 yen. The dollar rose 0.5 percent to 120.64 yen.

Source: Bloomberg

Japan Economy Grows More Than Forecast as Business Spends More

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Japan’s economy expanded for a second straight quarter, beating forecasts as businesses increased spending and boosted inventories.

Gross domestic product grew at an annualized 2.4 percent in the three months through March from the previous quarter, when it increased by 1.1 percent, the Cabinet Office said on Wednesday. The median estimate of 28 economists surveyed by Bloomberg was for a gain of 1.6 percent.

Capital investment gained 0.4 percent from the previous three months, rising for the first time in four quarters, today’s data showed. From the previous quarter, private consumption rose 0.4 percent, the same pace as in the final three months of 2014.

Inventory buildup added 0.5 percentage point to non-annualized growth in the first quarter, the data showed.

Source: Bloomberg

U.S. Stocks Close Little Changed From Records After Housing Data

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U.S. stocks closed little changed, with the Standard & Poor’s 500 Index slipping from a record, after data showing housing starts surged to a seven-year high bolstered speculation the Federal Reserve may raise interest rates this year.

The Standard & Poor’s 500 Index declined 0.1 percent to 2,127.87 at 4 p.m. in New York, snapping a three-session string of all-time highs. The Dow Jones Industrial Average rose 0.1 percent to a record for a second day. The Nasdaq Composite Index lost 0.2 percent.

A report today showed new residential construction surged in April to the highest level since November 2007, while more permits, a proxy for future construction, were issued than at any time since June 2008.

Source : Bloomberg

U.S. Stocks Fluctuate Amid All-Time Highs After Housing Data

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U.S. stocks fluctuated, with benchmark indexes near records, after data showing housing starts surged to a seven-year high bolstered speculation the Federal Reserve may raise interest rates this year.

Wal-Mart Stores Inc. slumped 4 percent after quarterly results missed estimates, while Urban Outfitters Inc. tumbled 17 percent after profit and sales were short of analysts’ projections. Energy shares slid with oil prices. Banks extended Monday’s gains amid rising bond yields. Take-Two Interactive Software Inc. jumped 15 percent after its results beat forecasts.

The Standard & Poor’s 500 Index rose less than 0.1 percent to 2,129.62 at 1:07 p.m. in New York, after the gauge Monday reached an all-time high for a third straight session. The Dow Jones Industrial Average gained 17.82 points, or 0.1 percent, to 18,316.70 after also closing at a record. The Nasdaq Composite Index slipped 0.1 percent.

A report today showed new residential construction surged in April to the highest level since November 2007, while more permits, a proxy for future construction, were issued than at any time since June 2008.

Source : Bloomberg