Gold Drops For 4th Day as Stock Market Recovery Cuts Safe Haven Demand

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Gold lost more ground on Wednesday as a rebound in stock markets reduced some of the precious metal's safe haven appeal with additional pressure from a strengthening greenback.

Asian shares crept off four-year lows as China's efforts to stabilise its currency brought a moment of calm to equity markets, even as oil marked a sorry new milestone under $30 a barrel.

A late rebound in energy and biotech shares helped push the S&P 500 to a second straight day of gains on Tuesday and the pan-European FTSEurofirst 300 index climbed 1.1 percent after four sessions of declines.

Spot gold slid 0.2 percent to $1,084.20 an ounce by 0347 GMT and U.S. gold futures gave up 0.2 percent to $1,083.20.

The metal's rally in early January to a nine-week top has run out of steam as expectations of further U.S. interest rate increase lowers demand for the non-interest-paying asset, while boosting the dollar.

The Fed raised rates in December and attention has shifted to how many hikes will follow in 2016.

The dollar steadied as the rush to safe haven currencies such as the yen and the euro halted temporarily after Chinese authorities intervened heavily to stem the yuan's fall.

Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rose 2.1 tonnes on Monday, data from the fund showed.

China has launched interbank gold trading at the beginning of this year, part of a broader drive to open up the country's bullion market and increase financial investments in the world's largest consumer of the precious metal.

Among other precious metals, palladium was little changed at $471.30 an ounce after sliding to a 5-1/2 year low of $449.55 an ounce on Tuesday.

Silver added 0.2 percent to $13.82 an ounce, while platinum gained 0.6 percent to $837.53 an ounce.

Source : Reuters

Aust Dollar Inches Above US70c

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The Australian dollar is slightly higher with traders hopeful China can control the turbulence on its currency and equity markets.

At 12.00pm (AEDT) on Wednesday, the currency was trading at US70.04c, up from US69.81c on Tuesday.

Expectations of some stability in the Chinese yuan and on the Chinese sharemarket has lifted risk appetite slightly, helping the Aussie.

All eyes will be on China’s currency fix, cash market open and the release the country’s December trade balance data on Wednesday.

Source : Market Spectator

Yen Starts 2016 as Currency of Choice on China Tumult, Oil Slide

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The yen has started 2016 as the currency of choice for investors rattled by a change in China’s approach to the yuan and oil prices sliding to a 12-year low.

Japan’s currency has strengthened 2 percent against the greenback this year, extending its advance on Tuesday after oil dropped below $30 a barrel. Gains were muted by an advance in U.S. stocks and after Chinese authorities stepped up efforts to stabilize the yuan. Australia’s dollar was within 1 percent of a four-month low before data that economists say will show Chinese imports and exports contracted in December.

The yen dropped 0.2 percent to 117.87 per dollar as of 9:40 a.m. in Tokyo and was little changed at 127.71 per euro. The dollar rose 0.2 percent to $1.0835 per euro.

The 14-day relative-strength index for the yen against the dollar was at 31 after being below 30 for five days through Tuesday as the yen jumped last week by 2.8 percent, the most since August 2013. A reading below 30 is a signal to some traders that a currency pair is poised to reverse direction.

The Australian dollar rose 0.3 percent to 70.09 U.S. cents after dropping to 69.28 cents on Jan. 11, the lowest since Sept. 8.

Source : Bloomberg

Japan Stocks Rise for First Time This Year After U.S. Rally

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Japan stocks rose for the first time this year, following U.S. equities higher, as speculation mounted that a China-fueled global rout has gone too far.

The Topix index jumped 2.8 percent to 1,441.39 at the trading break in Tokyo, the most since Sept. 9, after closing Tuesday at the lowest level in more than three months to cap the worst start to a year on record. The Nikkei 225 Stock Average gained 2.7 percent to 17,682.33.

The Topix’s 14-day relative strength index fell to 24.4 on Tuesday, below the level of 30 that some traders say indicates shares will rise. The stock index lost 9.4 percent in the first six days of the year.

Tire makers, brokerages and car manufacturers led gains among the 33 Topix industry groups. Electronic component makers TDK Corp., Murata Manufacturing Co. and Nidec Corp. jumped at least 3.9 percent after Credit Suisse Group AG boosted its target share price on the stocks.

Oriental Land Co., which operates the Tokyo Disney Resort, added 4.8 percent after the Nikkei newspaper said its operating profit will recover. Nintendo Co. jumped 7 percent on high expectations ahead of a new smartphone game release, analyst Hideki Yasuda at Ace Research Institute told Bloomberg.

Source : Bloomberg

China Stocks Rise Before Trade Data as Offshore Yuan Strengthens

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China stocks rose before trade data as the offshore yuan strengthened for a record fifth day.

The Shanghai Composite Index climbed 0.6 percent to 3,042.21 at 9:31 a.m. local time, led by consumer companies. Trade data due at 10 a.m. are expected to show steeper declines for both exports and imports. The yuan in Hong Kong gained 0.16 percent, taking its five-day advance to 2.1 percent.

Source : Bloomberg

Asian Stocks Rise Before China Trade Data as Japan Leads Advance

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Asian stocks rebounded from a three-year low, after a rally in U.S. equities, as Japanese shares climbed for the first time this year and investors awaited China trade data.

The MSCI Asia Pacific Index added 1 percent to 121.97 as of 9:11 a.m. in Tokyo, set to halt a seven-day losing streak after sliding to its lowest close since November 2012 on Tuesday. The Standard & Poor’s 500 Index rose for a second day on speculation the selloff that wiped out more than $5 trillion from global equity values this year has gone too far. Chinese data due Wednesday are expected to show accelerated declines in imports and exports in December, after the country’s defense of the yuan on Tuesday calmed investors also watching a deepening rout in raw materials.

China sparked a record surge in Hong Kong’s money-market rates on Tuesday to deter bearish speculators after reductions in its reference rate last week roiled global markets and exacerbated concerns over the country’s ability to deal with its slowdown. Economists predict trade data will show the steepest drop in Chinese exports since July and an ongoing slump in incoming shipments.

Source : Bloomberg