Gold Is Turmoil's Beneficiary as Soros Reminded of Market Crisis

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The dollar slumped the most in one month as upheaval in China’s stock and currency markets weighed on the outlook for higher interest rates in the U.S.

The greenback reached its lowest level in almost a year versus the yen after a 7 percent rout in China’s equity markets curtailed trading for the second time in four days. China’s foreign-exchange reserves slid more than forecast in December, capping their first-ever annual decline, prompting speculation that authorities are selling dollars to prop up the currency. Shorter-term U.S. debt yields declined and futures contracts show a 43 percent probability of a U.S. interest-rate rise by April, down from 56 percent on Dec. 31.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 peers, fell 0.4 percent to 1,237.09 as of 4:52 p.m. in New York, its first loss in nine days.

The yen rose 0.7 percent to 117.63 per dollar, touching the strongest on a closing basis since Feb. 5. Chinese stocks fell 8.5 percent in Shanghai that day, fueling volatility and risk aversion that spread around the world.

Source : Bloomberg

Gold Is Turmoil's Beneficiary as Soros Reminded of Market Crisis

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Gold is dusting off its credentials as the go-to commodity in troubled times and its producers are reaping the benefits.

Futures rallied above $1,100 an ounce to a two-month high, after a sell-off in Chinese shares forced the country’s stock exchanges to shut for a second time this week, spurring demand for a haven. Global markets are facing a crisis and investors need to be very cautious, billionaire George Soros said. Shares of bullion miners including Barrick Gold Corp. are climbing, even as the 80-member Bloomberg World Mining Index slides to the lowest in more than a decade.

After posting three straight annual declines, bullion is topping other commodities this month amid weakness in China’s currency and stock market and geopolitical tensions in the Middle East and North Korea. Soros told a forum in Colombo, Sri Lanka, that China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world.

Gold futures for delivery in February gained 1.5 percent to settle at $1,107.80 at 1:48 p.m. on the Comex in New York, after reaching $1,109.30, the highest for a most-active contract since Nov. 6. Prices are up for a fifth session, the longest run since October.

Silver futures also gained on the Comex. Platinum rose on the New York Mercantile Exchange, while palladium fell.

Source: Bloomberg

U.S. Equities Fall as China Turmoil Sparks Global Stocks Selloff

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U.S. stocks extended their three-month lows, with the Dow Jones Industrial Average dropping more than 390 points to post its biggest two-day drop since August, amid a China-led rout that continued to engulf markets around the globe.

The Standard & Poor’s 500 Index slid 2.4 percent to 1,943.09 at 4 p.m. in New York, falling to its lowest since Oct. 1 in the worst start to a year in data going back to 1928.

Equity markets worldwide tumbled after Chinese stock exchanges closed less than a half hour after opening, as a more than 7 percent plunge triggered a market-wide halt for the second time this week. China’s securities regulator has since suspended a new stock circuit-breaker that caused the halts.

A flight from risky assets in the first week of the new year has wiped $2.5 trillion from global equities, made worse by China’s central bank cutting its yuan reference rate for an eighth straight day. China’s tolerance for a weaker yuan is being seen as evidence policy makers are struggling to revive an economy that’s the world’s biggest consumer of energy, metals and grains.

Source : Bloomberg

U.S. Stocks Join China-Fueled Equities Rout as Crude Declines

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The worst start to a year in global stocks since 2000 extended to a fourth day, with the Dow Jones Industrial Average losing more than 200 points, as turmoil emanating from China spread around the world and billionaire George Soros warned that a larger crisis may be brewing.

The Dow average headed for its third drop of more than 1 percent this week, and developing-nation markets tumbled 2.5 percent. Chinese shares fell 7 percent after the central bank weakened the yuan an eighth day. Crude sank toward $33 a barrel in New York and copper dipped below $2 for the first time since 2009. The yen reached a four-month high and gold surged on haven demand. Treasuries weakened on speculation China will sell U.S. debt to raise cash.

The Standard & Poor’s 500 Index slid 1.5 percent at 12:39 p.m in New York. The index is down 4 percent this year. The MSCI All-Country World Index fell for a fourth day, bringing its slide this year to 4.8 percent.

China’s devaluation revived the angst that sent financial markets into turmoil last summer, driving U.S. stocks to three-month lows Wednesday in a selloff led by commodity producers. Comments by Soros exacerbated market jitters after he told an economic forum in Sri Lanka today that global markets are facing a crisis and investors need to be very cautious.

Source: Bloomberg

European Stocks Pummeled on China Woes as DAX Falls Below 10,000

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European stocks fell for the third time in four days, mirroring declines that shook global equities in August, as they extended the worst start to a year since 2000 amid a China-fueled selloff in mining and energy shares.

Europe’s equities have tumbled 5.3 percent in the first four days of the year, and companies with the most sales in the world’s second-biggest economy are bearing the brunt. Anglo American Plc and Glencore Plc slid 8.3 percent or more today, pushing a gauge of miners to its lowest level since 2009. Carmakers fell to to the lowest since October.

Stocks around the world are in retreat as an eighth day of cuts in the yuan’s reference rate exacerbated concern that growth in China is slowing more than previously forecast. The declines are a setback for European equity bulls who had speculated that central-bank stimulus and a slowly improving economy would insulate the region from stress in Asia and North America.

The Stoxx Europe 600 Index fell 2.2 percent at the close of trading. It pared losses of as much as 3.6 percent after China’s securities regulator suspended the circuit-breaker that forced local exchanges to shut early for the second day this week. Germany’s DAX Index lost 2.3 percent to 9,979.85, trading below 10,000 for the first time since October.

Source: Bloomberg