Gold Holds Near Five-Year Low on Expectations for Higher Rates

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Gold held a second day of declines as investors continued to expect an increase in U.S. borrowing costs by the end of the year, cutting the appeal of bullion which doesn’t pay interest.

Metal for immediate delivery was at $1,070.25 an ounce at 8:43 a.m. in Singapore from $1,069.18 on Monday, according to Bloomberg generic pricing. Prices fell to $1,064.55 on Nov. 18, the lowest since February 2010.

Federal Reserve policy makers are widely expected to increase the federal funds rate for the first time since 2006 when they meet in Washington Dec. 15-16, pushing up the dollar and pressuring gold. The chances of a rate rise next month are 74 percent, up from 50 percent at end-October, futures data show.

Spot silver was little changed after slumping to the lowest since August 2009 on Monday.

Source: Bloomberg

Dollar hits 7-month high vs. euro on December rate-hike expectations

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The dollar rose to its highest level against the euro since mid-April Monday after hawkish comments from San Francisco Federal Reserve President John Williams over the weekend reiterated the case for raising interest rates in December.

The euro traded at $1.0626 late Monday, compared with $1.0649 late Friday in New York. The shared currency traded as low as $1.0593 early in the session, its lowest level since mid-April, according to FactSet data.

The ICE U.S. Dollar Index a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 99.7880.

The British pound traded at $1.5110 late Monday, its weakest level in two weeks. That’s compared with $1.5192 late Friday.

The dollar rose to ¥122.88, compared with ¥122.77 late Friday

Source: MarketWatch

Asia Stocks Drop as Tumbling Commodity Prices Weigh on Producers

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Asian stocks fell as tumbling commodity prices dragged raw-materials shares lower, with BHP Billiton Ltd. on course to close at the lowest since 2008.

The MSCI Asia Pacific Index lost 0.1 percent to 134.16 as of 9:00 a.m. in Tokyo, as Japanese markets opened after a holiday. Material shares led losses among the regional measure’s 10 industry groups. The increased likelihood of a Federal Reserve interest-rate increase this year is sending the dollar higher, making industrial metals more expensive for buyers holding other currencies. Copper fell below $4,500 a metric ton for the first time in six years and nickel touched the lowest in more than a decade. U.S. crude rose back above $42 per barrel after Saudi Arabia pledged to help stabilize markets.

Australia’s S&P/ASX 200 Index slipped 0.4 percent. BHP Billiton fell 1.7 percent in Sydney, the biggest drag on the regional benchmark gauge. Rio Tinto Group lost 1.1 percent.

Source: Bloomberg

Japan Stocks Fall as Investors Weigh Commodity Slump, Stimulus

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Japanese stocks slipped after trading resumed after a holiday, with investors weighing slumping commodity prices with expectations for economic stimulus. Airlines led losses and paper makers gained.

The Topix index lost 0.2 percent to 1,600.28 as of 9:04 a.m. in Tokyo, paring last week’s gain of 1.1 percent. The Nikkei 225 Stock Average dropped 0.1 percent to 19,857.34, after closing on Friday closing at the highest level since Aug. 20. U.S. stocks retreated on Monday amid a slump in commodity prices after capping the best week of the year on Friday. The world’s biggest economy reports on third-quarter growth on Tuesday.

Prime Minister Shinzo Abe announced a plan in September to grow the Japan’s GDP to 600 trillion yen, without specifying a timeline. The government will outline new steps to stimulate the economy by the end of November, the Asahi newspaper reported, including plans to support pensioners, lower the cost to buy energy-efficient homes and increase the minimum wage.

Copper futures held losses near a more than six-year low after the metal slid last session with nickel, which touched its lowest price in more than a decade concern over a glut in supply and as the greenback extended gains.

E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying gauge slipped 0.1 percent Monday as expectations the Federal Reserve will soon raise U.S. interest rates boosted the dollar, sending commodity producers and energy shares lower.

Source: Bloomberg

U.S. Stocks Slip Amid Drag From Pfizer Deal, Technology Shares

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U.S. stocks slipped following the Standard & Poor’s 500 Index’s best weekly rally this year, as gains in consumer companies were overshadowed by a retreat in Allergan Plc and Pfizer Inc. amid their record $160 billion merger deal.

Allergan and Pfizer slipped more than 2.6 percent. Electronic Arts Inc. fell 4.8 percent as GameStop Inc. said sales of the video-game maker’s Star Wars: Battlefront were weaker than expected. Tyson Foods Inc. gained 10 percent after boosting its dividend and its profit outlook was better than some analysts expected. Kellogg Co. rallied the most in almost a year after an analyst upgrade.

The S&P 500 fell 0.1 percent to 2,086.59 at 4 p.m. in New York, after rising 3.3 percent last week, the most since December. The Dow Jones Industrial Average lost 31.13 points, or 0.2 percent, to 17,792.68. The Nasdaq Composite Index declined 0.1 percent. The Russell 2000 Index increased 0.4 percent, bolstered by gains in health-care and consumer discretionary shares. About 6.2 billion shares traded hands on U.S. exchanges 17 percent below the three-month average.

Source: Bloomberg