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Gold Declines in New York Before Fed Meeting as Dollar Advances
2012-03-13 13:30:18.333 GMT
By Maria Kolesnikova
March 13 (Bloomberg) -- Gold may fall in New York before a Federal Open Market Committee meeting and as Greece prepares to receive a second bailout. Platinum rose above gold for a second day.
The best six months of job gains since 2006 have helped reduce the odds of a third round of asset purchases by the U.S.
Federal Reserve, according to a Bloomberg News survey. Bullion had the biggest one-day decline since 2008 on Feb. 29 after Fed Chairman Ben S. Bernanke gave no signal of a third round of quantitative easing, or QE3, sending the dollar higher. The dollar gained today against a six-currency basket including the euro and yen.
“The FOMC will be important, after the market interpreted Bernanke’s recent silence on QE3 as an indication that it was unlikely to happen,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. “The gold market will be hanging on his every word toni
Gold futures for April delivery were down 0.8 percent at
$1,686.70 an ounce by 9:15 a.m. on the Comex in New York. Gold for immediate delivery fell 0.9 percent to $1,686.23 an ounce.
Euro-area finance ministers yesterday signed off on a second Greek bailout and will give formal approval tomorrow, a day before the International Monetary Fund board votes on its contribution.
FOMC Statement
The FOMC plans to release a statement at about 2:15 p.m.
in Washington after its meeting on rates. The U.S. dollar strengthened as much as 0.3 percent against the euro and as much as 0.1 percent against the six-currency basket. Gold typically moves inversely to the greenback.
“Investors continue to watch the dollar rate, waiting on the sidelines while many are concerned about an even stronger dollar rebound,” Andrey Kryuchenkov, a London-based analyst at VTB Capital, wrote in a report toda
Gold assets in exchange-traded products rose to a record
2,408.981 metric tons yesterday, and are up 2.2 percent this year, according to data compiled by Bloomberg. Holdings in exchange-traded products backed by platinum climbed 8.2 percent this year, compared with a 2.8 percent gain in silver ETPs.
Platinum prices climbed above gold for the first time since September yesterday on concern that production in South Africa is declining amid improving global auto sales. One ounce of platinum bought as much as 1.0032 ounces of gold today, the most since Sept. 19, according to data compiled by Bloomberg. The ratio was last at 1.0002.
Platinum for April was little-changed at $1,696.20 an ounce. The price has gained 21 percent this year and has tied with silver as the best-performing precious metal.
Silver for May delivery was up 0.5 percent at $33.565 an ounce. Palladium for June delivery was down 0.5 percent at
$700.70 an ounce.
For Related News and Information:
Top commodity reports: CTOP
Top metal and mining stories: METT
--With assistance from Glenys Sim in Singapore. Editor: John Deane
Crude Rises as U.S. Retail Sales Increase Most in Five Months
2012-03-13 19:55:02.912 GMT
By Moming Zhou
March 13 (Bloomberg) -- Oil rose after U.S. retail sales increased by the most in five months and equities gained, signaling economic growth and higher demand.
Prices advanced 0.4 percent as retail sales rose 1.1 percent in February, the Commerce Department said. The Dow Jones Industrial Average reached the highest level in four years. Oil pared gains as the dollar strengthened against the euro after the Federal Reserve raised its assessment of the economy and refrained from new actions to lower borrowing costs.
“Prices were higher as we had some positive economic data,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “The Fed is saying that there will be no additional stimulus.”
Oil for April delivery rose 37 cents to settle at $106.71 a barrel on the New York Mercantile Exchange. The price ranged from $105.67 to $107.35. The futures are up 8 percent this year.
Brent crude for April settlement on the London-based ICE Futures Europe exchange gained 88 cents, or 0.7 percent, to
$126.22 a barrel, the highest settlement price in 11 months.
The retail sales increase matched the median forecast of 81 economists surveyed by Bloomberg News and followed a January gain of 0.6 percent that was larger than previously estimated.
Sales rose 1.6 percent at automobile dealers, reversing a 1.6 percent decrease the prior month. Demand improved in 11 of 13 industry categories.
“Retail sales definitely are having a bullish impact on the market,” said Phil Streible, a Chicago-based commodities broker at RJO Futures.
Vehicle Sales
Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. Light-vehicle sales accelerated to a 15 million annual rate, the strongest since February 2008, according to Ward’s Automotive Group.
The Standard & Poor’s 500 Index advanced for the fifth straight day, climbing 1.5 percent at 3:33 p.m. The index is up
11 percent in 2012.
Prices also gained after data showed German investor confidence jumped to a 21-month high. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations advanced to 22.3 from 5.4 in February.
The index, which is designed to predict economic developments six months in advance, increased for the fourth straight month. It reached the highest reading since June 2010.
Economists forecast a gain to 10, according to the median of 36 estimates in a Bloomberg News survey.
‘Rekindling Rally’
“The market pushed high on German confidence and retail sales, rekindling the rally to $110,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
“The economic data is boosting expectations for higher demand.”
Crude fell back as the dollar strengthened after the Fed released its statement at around 2:15 p.m.
Inflation “has been subdued in recent months although prices of crude oil and gasoline have increased lately,” the Federal Open Market Committee said in a statement at the conclusion of a meeting today in Washington. The increase in oil will “push up inflation temporarily, but the committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.”
The dollar increased its gain against the euro to 0.7 percent after the Fed’s statement from 0.4 percent before. The dollar strengthened as much as 0.8 percent in early trading, helping push oil down. A stronger dollar and weaker euro reduce oil’s appeal as an investment alternative.
“We are moving with the dollar and equities again,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago.
Price Concern
Crude prices are too high, three oil ministers said at the International Energy Forum yesterday in Kuwait. Mohamed Al-Hamli of the United Arab Emirates, Mohammed Al-Rumhy of Oman and Jose Maria Botelho de Vasconcelos of Angola all said prices should be lower. The Angolan minister said he’d prefer to see Brent at
$110 to $115 a barrel.
U.S. gasoline inventories probably fell 1 million barrels last week, according to the median estimate of nine analysts surveyed by Bloomberg News before an Energy Department report tomorrow. Distillate supplies, including diesel and heating oil, probably dropped 1.5 million barrels and crude stockpiles rose
1.6 million, the survey showed.
The industry-funded American Petroleum Institute will release its own stockpile data in Washington today.
Electronic trading volume on the Nymex was 582,615 contracts as of 3:32 p.m. in New York. Volume totaled 525,361 contracts yesterday, 16 percent below the three-month average.
Open interest was 1.58 million contracts.
For Related News and Information:
Top energy, oil stories: ETOP and OTOP News on oil inventories: TNI OIL INV News on oil markets: NI OILMARKET News on OPEC: NI OPEC Global energy statistics: ENST OLD Oil markets menu: OIL
--With assistance from Grant Smith in London, Joshua Zumbrun and Shobhana Chandra in Washington and Gabi Thesing in London.
Editors: Richard Stubbe, Dan Stets
U.S. Stocks Little Changed as Oil Rally Sparks Inflation Concern
2012-03-16 18:56:46.666 GMT
By Rita Nazareth
March 16 (Bloomberg) -- U.S. stocks were little changed, with the Standard & Poor’s 500 Index trading at the highest level since May 2008, as an increase in oil and consumer prices bolstered inflation concern as the economy improves
Energy shares had the biggest advance in the S&P 500 among
10 industries. Noble Corp. and Chesapeake Energy Corp. increased more than 2.8 percent. The Bloomberg U.S. Airlines Index slumped
2.5 percent amid expectations about higher fuel prices. Bank of America Corp. jumped 5.3 percent, surging 21 percent in four days. Apple Inc. fell 0.1 percent, after briefly rallying above
$600 yesterday, as it started selling the new iPad today.
The S&P 500 advanced 0.2 percent to 1,405.07 at 2:53 p.m.
New York time, poised for a fifth straight week of gains. The benchmark gauge has risen 2.5 percent since March 9, the biggest weekly gain in 2012. The Dow Jones Industrial Average increased
3.33 points, or less than 0.1 percent, to 13,256.09. About 5.3 billion shares changed hands on U.S. exchanges.
“The bugaboo in the background is oil prices,” said Madelynn Matlock, who helps oversee about $14.6 billion at Huntington Asset Advisors in Cincinnati. “I filled up my car yesterday and it hurts. Things are improving at a slow, but steady pace. If oil prices pop up, it will be different sto
Equities were little changed as the cost of living rose in February by the most in 10 months, reflecting a jump in gasoline. Confidence among consumers unexpectedly fell in March, a sign rising fuel costs may be starting to weigh on economic prospects. Treasury Secretary Timothy F. Geithner said yesterday rising oil prices show “we still face a dangerous and uncertain world” and there’s no easy way to lower gasoline cos
Best Since 1998
The S&P 500 is still on pace for the best first quarter since 1998, after rallying 12 percent, amid better-than- estimated economic and corporate reports. It trades at 14.5 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4 times earnings.
“It’s a bit of acrophobia,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, citing potential investors’ fear after the S&P 500 rose to the highest level since 2008. His firm oversees $209 billion. “The market has just gone up pretty quickly. Meantime, slow and slightly improving has been the way to look at the eco
Energy shares gained, while airlines slumped as oil traded above $106 a barrel. Noble surged 5.6 percent to $41.55.
Chesapeake Energy added 2.8 percent to $25.12. Exxon Mobil Corp.
advanced 0.7 percent to $86.70. US Airways Group Inc. lost 4.6 percent to $7.23. United Continental Holdings Inc. declined 2.1 percent to $19.97.
Financial Shares
Financial shares in the S&P 500 rebounded from earlier losses. The KBW Bank Index rallied 9.4 percent in four days following dividend increases by banks including JPMorgan Chase & Co. Bank of America jumped 5.3 percent, the most in the Dow, to $9.73. Zions Bancorporation added 0.9 percent to $22.33.
American International Group Inc. fell 0.1 percent to $28.06, after rising as much as 1.1 percent earlier today. The insurer’s repayment of $1.6 billion to the U.S. Treasury Department pushed the government’s portion of recouped financial-bailout money to 80 percent, said a Treasury official familiar with the matte
Apple dropped 0.1 percent to $585.26. The 9.7-inch iPad, unveiled on March 7, is the biggest upgrade yet to Apple’s tablet before Microsoft Corp. introduces new software for competing devices
Generating demand with the model is important for Apple to fend off competition from devices using Google Inc.’s Android operating system and the $199 Kindle Fire from Amazon.com Inc
that’s popular among cost-conscious buyers
Higher Forecast
The S&P 500, which yesterday rose above 1,400 for the first time in almost four years amid better-than-estimated economic data, may extend its gain to 1,470, according to Credit Suisse Group AG’s Andrew Garthwaite. He lifted his forecast for the index at the end of 2012 from a previous projection of 1,400, citing increasing risks for bonds and momentum in global earnings
“The prospects for economic growth are pretty good
Michelle Gibley, director of international research at San Francisco-based Charles Schwab Corp., said in a telephone interview. Her firm has $1.81 trillion in client assets. “Near term, you could see some volatility in stocks because the run has been so strong. Longer term, the outlook looks good
The benchmark measure has “healthy intermediate-term momentum” that helped it recover from a slump at the beginning of the month and may drive it 2.7 percent higher, MKM Partners LP’s chief market technician sa
‘Breakou
The market may be staging a “breakout” after matching i
2011 highs last week, MKM Partners’ Katie Stockton said, citing the momentum indicator known as Moving Average Convergence/Divergence. A second-straight weekly close abov
1,370 today would confirm the trend and open the way to an increase to 1,440, Stockton said.
“I’m bullish on the market from an intermediate perspective based largely on momentum and this breakout that appears to be under way,” Stockton said in a phone intervi
“The fact that the S&P 500 has managed to exceed resistance at the 2011 high tells us that breakout should overrule any negative set-up otherwise
For Related News and Information:
Developed Markets View: DMMV
World stock indexes: WEI
Most-active U.S. stocks: MOST US
U.S. stock market map: IMAP US
Top stories on stocks: TOP STK
Stories on U.S. stocks: NI USS
Feature stories: TNI USS FEA
Equity screening: EQS
Graphing: GRAPH
Equity derivatives: EDRV
Stories on U.S. stock options: NI USO
--With assistance from Inyoung Hwang and Joseph Ciolli in New York. Editor: Jeff Sutherland
Dollar Weakens as Inflation Data Back Fed Stance; Krone Advances
2012-03-16 13:24:00.456 GMT
By Allison Bennett
March 16 (Bloomberg) -- The dollar weakened against most of its major peers after U.S. inflation data fueled speculation Federal Reserve policy makers will maintain economic stimulus.
The U.S. currency fell against the 17-nation euro as a gauge of consumer prices excluding food and energy rose less than forecast. Norway’s krone advanced with crude. Norway’s krone advanced with crude oil even as the central bank warned the currency may weaken. The yen headed for its sixth weekly drop against the dollar, as signs of U.S. growth and the prospects for further stimulus by the Bank of Japan sapped demand for the Asian currency.
“The Fed didn’t do anything this week to push people off the fence one way or another,” said Brian Kim, a currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit in Stamford, Connecticut. “If we’d had a surprise to the upside, people would have felt more convicted in paring back easing expectations and then it comes in a little soft on core CPI and people may worry they’ve gotten ahead of themselves.”
The dollar fell 0.3 percent to $1.3124 per euro at 9:22 a.m. New York time. The U.S. currency gained 0.1 percent to
83.69 yen, adding to a 1.5 percent weekly increase of 1.5 percent.
Inflation Report
The consumer-price index climbed 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News, after increasing 0.2 percent the prior month, the Labor Department reported today in Washington.
The core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.
“This confirms the Fed’s view that inflation remains subdued and may alter investor’s perceptions about the possibility of further accommodation from the Fed in the next few months,” said Andrew Cox, a currency strategist at Citigroup Inc. in New York. “The month-over-month CPI print was enough of a miss to shake out some of the short-term dollar longs in the market.” A long position is a bet that an asset will increase in value.
The Fed left unchanged March 13 its statement that economic conditions would probably warrant “exceptionally low” interest rates at least through late 2014. It has held its target rate to a range of zero to 0.25 percent since December 2008.
Inflation “has been subdued in recent months although prices of crude oil and gasoline have increased lately,” the Fed said. The increase in oil will “push up inflation temporarily, but the committee anticipates that subsequently inflation will run at or below the rate that it judges most consistent with its dual mandate.”
The yen has dropped 5.7 percent in the past month, the worst performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. It is also the worst performer so far this year, with an 11 percent decline. The dollar has climbed 0.7 percent since a month ago and the euro advanced 0.6 percent.
For Related News and Information:
Stories on currencies: NI FRX
Stories on central banks: NI CEN
Foreign-Exchange Forecasts: FXFC
Foreign-Exchange Information Portal: FXIP
--Editors: Paul Cox, Dennis Fitzgerald