Gold Declines to Four-Week Low as Fed Rate Outlook Hurts Demand

---

Gold retreated to the lowest level in four weeks on renewed concern that the Federal Reserve will increase U.S. interest rates in December, denting demand for the metal as a store of value.

Bullion for immediate delivery fell as much as 0.7 percent to $1,134.39 an ounce, the lowest level since Oct. 5, and traded at $1,139.45 at 9:06 a.m. in Singapore, according to Bloomberg generic pricing. Prices dropped 1.9 percent last week, the most since Aug. 28.

The precious metal fell for the past five quarters amid speculation the Fed will raise rates for the first time since 2006, diminishing the metal’s appeal because it doesn’t pay interest. U.S. policy makers signaled they’re still considering tighter monetary policy this year, surprising many gold investors who had been buying on speculation that a spate of uneven U.S. economic data would keep rates low for longer.

Traders see a 50 percent chance the U.S. central bank will raise its benchmark rate from near zero in December, according to futures data compiled by Bloomberg as of Friday. That’s up from 34 percent at the start of last week, before the Federal Open Market Committee’s statement on Wednesday.

Among U.S. data this week are figures on monthly non-farm payrolls, due on Friday. Before that, Fed Chair Janet Yellen is scheduled to testify Wednesday before the House Financial Services Committee.

Silver, platinum and palladium dropped on Monday.

Source: Bloomberg

Oil Slides as China Factory Gauge Signals Continued Contraction

---

Crude declined for the first time in four days as a measure of manufacturing activity signaled contraction for a third straight month in China, the world’s second-biggest oil consumer.

Futures retreated as much as 0.8 percent in New York after advancing 4.5 percent last week. China’s official purchasing managers index remained at 49.8 in October, the National Bureau of Statistics said Sunday, compared with an estimate of 50, the line between expansion and contraction. Iran will officially inform other OPEC members of its plans to raise crude production at the group’s Dec. 4 meeting, Oil Minister Bijan Namdar Zanganeh said in an interview with the Mehr news agency.

Oil failed to sustain a rally above $50 a barrel in October amid signs a global glut will be prolonged as rising U.S. stockpiles keep supplies more than 100 million barrels above the five-year seasonal average. The Organization of Petroleum Exporting Countries continues to pump crude at a faster pace than the limit the group has set for itself, with production near the highest level since 2008. China stepped up monetary easing with its sixth interest-rate cut in a year last month amid a slowing economy.

West Texas Intermediate for December delivery lost as much as 38 cents to $46.21 a barrel on the New York Mercantile Exchange and was at $46.21 at 8:02 a.m. Singapore time. The contract gained 53 cents to $46.59 on Friday, the highest close since Oct. 16. The volume of all futures traded was about 54 percent below the 100-day average. Prices have decreased 13 percent this year.

Brent for December settlement slid 18 cents to $49.38 a barrel on the London-based ICE Futures Europe exchange. Prices rose 3.3 percent last week. The European benchmark crude traded at a premium of $3.13 to WTI.

Source: Bloomberg

Asia Stocks Fall on China Factory Data as Industrial Shares Drop

---

Asian stocks dropped, after their best month since May 2009, as industrial companies led losses following data signaling a contraction in Chinese manufacturing.

The MSCI Asia Pacific Index fell 0.5 percent to 133.77 as of 9:01 a.m. in Tokyo. The measure rallied 8.6 percent in October as China cut interest rates and the European Central Bank hinted at potential extra stimulus, while U.S. and Japanese policy makers kept their monetary policies accommodative. China’s first key indicator this quarter, an official factory gauge, missed analysts’ estimates, signaling that the manufacturing sector has yet to bottom out as global demand falters and deflationary pressures deepen.

The purchasing managers’ index was unchanged at 49.8 in October, the National Bureau of Statistics said Sunday, compared with the median estimate of 50 in a Bloomberg survey. The non-manufacturing PMI, a barometer of services and construction, fell to 53.1 from 53.4 in September, the weakest since December 2008. Final numbers for the private Caixin China factory PMI are due Monday, with economists surveyed by Bloomberg projecting a reading of 47.6.

Source: Bloomberg

Japan Stocks Fall After China Factory Gauge Signals Contraction

---

Japanese stocks fell, after the Topix index posted its steepest monthly gain since April 2013, as a China factory gauge signaled a third month of contraction. Non-ferrous metal producers led declines.

The Topix retreated 1.2 percent to 1,538.97 as of 9:00 a.m. in Tokyo, after surging 10 percent last month. The Nikkei 225 Stock Average lost 1.3 percent to 18,844.69 on Monday. The yen traded at 120.51 per dollar, strengthening for a second day after the Bank of Japan held off from adding to monetary easing on Friday. China’s official factory gauge -- the first key economic indicator for this quarter -- came in at 49.8 in October, missing economists’ estimates and holding below 50, the line between expansion and contraction.

China’s official non-manufacturing purchasing managers index, a barometer of services and construction, fell to 53.1 from 53.4 in September, the weakest since December 2008.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.2 percent after the underlying measure fell 0.5 percent on Friday, closing out October with an 8.3 percent gain, the best month in four years. The Stoxx Europe 600 Index advanced 8 percent, its biggest monthly rally since July 2009.

Source: Bloomberg