Gold Heads for Biggest Weekly Drop in a Month as Markets Rally

---

Gold headed for the biggest weekly decline in a month after a report showed the U.S. economy grew stronger than expected in the second quarter, reducing the metal’s appeal as a haven.

Bullion for immediate delivery was little changed at $1,126.27 an ounce at 8:58 a.m. in Singapore, according to Bloomberg generic pricing. It has declined 2.7 percent this week, the first weekly loss in three.

The U.S. expanded at a 3.7 percent annual rate last quarter, exceeding all estimates of economists surveyed by Bloomberg, figures showed Thursday, propelling Asian and U.S. equities and the dollar higher. An improving economy takes the luster off of gold because it increases the chances that the Federal Reserve will start tightening monetary policy, reducing the appeal of precious metals because they don’t pay interest.

Gold futures for December delivery added 0.3 percent to $1,126 an ounce on the Comex, heading for a 2.9 percent decline this week. Palladium surged 3.3 percent to $581 an ounce, extending a 5.6 percent advance on Thursday, the most since Dec. 2011. Silver for immediate delivery climbed 0.4 percent to $14.5530 an ounce, while platinum rose 0.8 percent to $1,008.50 an ounce.

Source : Bloomberg

Dollar Heads for Weekly Gain as Traders Boost Bets on Rate Rise

---

The dollar headed for its first weekly advance since the start of this month as a rally in stocks and accelerating growth fueled speculation the U.S. economy will be resilient to a slowdown in China.

The greenback has gained against all its Group-of-10 peers except the yen this week as traders increased to 54 percent the odds the Federal Reserve will raise interest rates this year, from as low as 46 percent on Tuesday. The currency of New Zealand, which has China as its biggest trading partner, led declines among major counterparts this week.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 major peers, has risen 0.5 percent this week to 1,205.76 as of 9:52 a.m. in Tokyo. The greenback appreciated 1.3 percent to $1.1236 per euro, and fell 0.8 percent to 121.13 yen. It was little changed Friday.

The dollar climbed for a third day versus the euro Thursday after a report showed U.S. gross domestic product rose at a 3.7 percent annualized rate in the second quarter, exceeding all estimates of economists surveyed by Bloomberg. A day earlier, Commerce Department data showed orders for capital goods increased by the most in a year in July.

Kansas City Fed President Esther George said it’s too soon to tell whether market volatility will affect the U.S. economy, and every policy-setting meeting is a live option to start raising rates.

The kiwi slid 2.9 percent to 64.95 U.S. cents this week and the Australian dollar dropped 1.7 percent to 71.89 cents.

Source : Bloomberg

China Stocks Rise for Second Day as State Buying Seen Continuing

---

China stocks rose for a second day amid speculation the government has resumed its intervention in the equities market.

The Shanghai Composite Index climbed 1.4 percent to 3,125.45 at 9:34 a.m., paring this week’s loss to 11 percent. The benchmark index rallied 5.3 percent on Thursday with all of the gains coming in the last 45 minutes of trading. PetroChina Co. led a rally for energy producers after crude futures soared 10 percent in New York on Thursday. The offshore yuan rose after the central bank boosted the currency’s reference rate by the most in five months.

Policy makers want to stabilize equities before a Sept. 3 military parade celebrating the 70th anniversary of the World War II victory over Japan, said two of the people, who asked not to be identified because the move wasn’t publicly announced. The shift followed the absence of state buying earlier this week.

The Shanghai Composite has fallen 40 percent since the June peak amid concern the government has scaled back efforts to prop up equities and the deepning economic slowdown will hurt corporate profits. Data on Friday showed industrial companies’ profits slid for a second month, dropping 2.9 percent in July.

Source : Bloomberg

China Stock-Index Futures Rise as State Buying Seen Continuing

---

China stock-index futures rose amid speculation the government has resumed its intervention in the equities market.

CSI 300 futures for September jumped 4 percent at 9:15 a.m. local time, before the release of industrial companies’ profits. The central bank raised the yuan reference rate by 0.15 percent to 6.3986 per dollar on Friday morning, the most since March.

The Shanghai Composite Index rallied 5.3 percent to 3,083.59 on Thursday, with all of the gains coming in the last 45 minutes of trading amid speculation state funds have resumed buying. The benchmark gauge has lost 12 percent this week.

Policy makers want to stabilize equities before a Sept. 3 military parade celebrating the 70th anniversary of the World War II victory over Japan, said two of the people, who asked not to be identified because the move wasn’t publicly announced. The shift followed the absence of state buying earlier this week.

The intervention to prop up shares is part of a broader effort to ensure nothing detracts from the parade, an event the government will use to demonstrate its rising military and political might. The parade has been planned for months and will provide President Xi Jinping his first opportunity to publicly present himself to the world as China’s commander in chief.

The Shanghai Composite has fallen 40 percent since the June peak amid concern the government has scaled back efforts to prop up equities and the economic slowdown was deepening.

China Securities Finance may have applied for 1.4 trillion yuan ($219 billion) of borrowing in the interbank market, Caixin reported, citing unidentified bank officials. The government should adopt a proactive fiscal policy and further ease monetary policy, the Economic Daily wrote in a front-page commentary.

Source : Bloomberg

Asian Stocks Rise as U.S. Economy Grows Faster Than Forecast

---

Asian stocks rose for a third day as a global rally gathered pace and the U.S. economy grew faster than expected in the second quarter.

The MSCI Asia Pacific Index gained 0.4 percent to 129.32 as of 9:01 a.m. in Tokyo. The gauge, which began this week with a two-day 5.1 percent slump, has rallied the past three days. Futures contracts indicated Chinese markets will continue a rebound, with contracts on the FTSE China A50 Index gaining 2.3 percent and those on the Hang Seng China Enterprises Index rising 1.8 percent.

Data on Thursday showed U.S. gross domestic product rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg, and up from the 2.3 percent reported last month. A separate report showed filings for jobless benefits declined to a three-week low.

The data come as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the interest rate since 2006. Central bankers gather at Jackson Hole, Wyoming, for a discussion on inflation just as China’s slowdown renews fears of falling prices. Fed Chair Janet Yellen won’t attend this year.

Source : Bloomberg