Gold Gives Up Gains as Commodity Slump Revives Deflation Concern

---

Gold gave up most of its earlier gains as the meltdown across commodity markets revived concerns over deflation, cutting the appeal of precious metals as a store of value.

The Bloomberg Commodity Index of 22 components had its biggest intraday loss in a month, led by declines in wheat and oil. Investors dumped raw materials after China surprised markets by devaluing its currency, making imports of grains, energy and metals more expensive. Gold earlier rose as China’s move spurred demand for haven assets, but as the losses in commodities deepened, bullion pared its advance.

Gold futures for December delivery gained 0.3 percent to settle at $1,107.70 an ounce at 1:42 p.m. on the Comex in New York, after touching $1,119.10, the highest since July 20. Trading was about 30 percent higher than the 100-day average for this time, data compiled by Bloomberg show.

Prices tumbled 6.5 percent in July, reaching a five-year low. Guidance from the Federal Reserve that policy makers will probably raise interest rates this year has cut demand for gold because it doesn’t pay interest, unlike competing assets. The metal is heading for a third straight annual loss amid low inflation, a stronger dollar and gains for U.S. equities.

Also on the Comex, silver futures for September delivery dropped 0.1 percent to $15.284 an ounce. On the New York Mercantile Exchange, palladium also fell, while platinum rose.

Source : Bloomberg

Oil Resumes Slide Following Yuan Devaluation as Surplus Persists

---

Oil fell after the biggest rally in a month in New York as China devalued its currency and OPEC raised output to a three-year high.

West Texas Intermediate futures declined as much as 1.8 percent. China, the world’s second-biggest oil user, cut the yuan’s reference rate by the most in two decades allowing depreciation to combat a slump in exports. OPEC production climbed as Iran pumped the most since sanctions were strengthened in 2012, according to the group’s monthly report.

Oil has dropped more than 25 percent since this year’s peak closing price in June on concern the global surplus that drove crude into a bear market will persist. In July the Bloomberg Commodity Index of 22 raw materials capped the biggest monthly decline since 2011 on faltering demand in China and expanding supply.

West Texas Intermediate for September delivery fell 72 cents to $44.24 a barrel on the New York Mercantile Exchange at 11:31 a.m. London time. The contract gained $1.09 to $44.96 on Monday. The volume of all futures traded was about 70 percent above the 100-day average. Prices have decreased about 17 percent this year.

Source : Bloomberg

Japanese Stocks Decline With Global Markets on Yuan Devaluation

---

Japanese stocks fell, following global equities lower, after China’s devaluation of its currency heightened concern about slowing growth in the world’s second-largest economy and damped the outlook for exporters.

The Topix index declined 0.3 percent to 1,682.55 as of 9:01 a.m. in Tokyo, with all but eight of its 33 industry groups falling. The Nikkei 225 Stock Average slid 0.3 percent to 20,650.18. The yen rose 0.3 percent to 19.54 per yuan in offshore trading after yesterday strengthening the most since December after the biggest yuan devaluation in two decades. The move stoked fears of a new currency war and sparked a sell-off in global shares.

China’s policy shift follows economic reports this month that showed a plunge in overseas shipments, weaker-than-estimated manufacturing and slowing credit growth. The move to support exporters and stem the deepest economic slowdown since 1990 heightens the risk of competitive currency devaluations as global demand wanes.

China reports retail sales and factory output Wednesday, which may provide further clues on the extent of the slowdown. Minutes of the Bank of Japan’s most recent meeting are also due.

Futures on the Standard & Poor’s 500 Index rose 0.2 percent after the underlying measure slumped 1 percent on Tuesday in New York. Carmakers and luxury-goods producers slipped, with the yuan’s steepest decline in at least 20 years seen as eroding the buying power of Chinese consumers. The Europe Stoxx 600 Index fell 1.6 percent. Emerging-market stocks entered a bear market.

Source: Bloomberg

Asian Stocks Extend One-Month Low as Yuan Move Weighs on Markets

---

Asian stocks fell, with the regional benchmark index extending a one-month low, after China’s yuan devaluation pushed global equities lower and sent a gauge of emerging-country shares into a bear market.

The MSCI Asia Pacific Index dropped 0.2 percent to 139.75 as of 9:02 a.m. in Tokyo, heading for its lowest close since July 8. China lowered the yuan’s daily reference rate by 1.9 percent amid a slew of data showing decelerating growth for the world’s second-biggest economy. The nation’s broadest measure of new credit missed economists’ forecasts last month, according to data released on Tuesday, while weekend reports showed exports fell more than expected.

China’s surprise move sparked fears of an Asian currency war and damped bets the Federal Reserve will raise interest rates in September. China reports on retail sales and factory output Wednesday. Minutes of the Bank of Japan’s most recent meeting are also due.

Japan’s Topix index fell 0.2 percent. South Korea’s Kospi index lost 0.2 percent. The S&P/ASX 200 Index dropped 0.3 percent. New Zealand’s NZX 50 Index slid 0.6 percent. Markets in China and Hong Kong have yet to open.

Source: Bloomberg

U.S. Stocks Decline With Global Markets as China Devalues Yuan

---

U.S. stocks slid, following equities’ biggest gain since May, as China’s currency devaluation sparked concern across global markets that the world’s second-largest economy is headed for a deeper slowdown.

The Standard & Poor’s 500 Index declined 0.9 percent to 2,084.35 at 4 p.m. in New York, with the gauge holding above its average price during the past 200 days.

China devalued the yuan by 1.9 percent, the most in two decades, after data this month showed a plunge in exports, weaker-than-estimated manufacturing and a slowdown credit growth. The surprise move rippled through global markets, sparking selloffs in emerging-market currencies, commodities, and auto and luxury stocks with exposure to China.

A rally in commodities from oil to copper helped the S&P 500 jump 1.3 percent Monday. Those trades largely reversed today on concern demand from China, the world’s biggest consumer of energy and metals, will slow and yuan weakness will erode the buying power of Chinese consumers. Similar worries about the country’s growth helped send the benchmark index down as much as 4 percent last month from its May record.

Source : Bloomberg