Gold Extends Losses as U.S. Equities Climbed

Gold futures fell to a 15 week low in New York as U.S. equities climbed to a record, curbing demand for the precious metal as an alternative investment. A report yesterday showed an unexpected increase in durable goods orders boosted growth prospects for the U.S., the world’s largest economy.

Gold has declined 9.1% from a six-month high in March as the U.S. economy showed signs of improvement. Gold futures for August delivery fell 2% to settle at $1,265.70 per ounce yesterday after touching $1,264.50 per ounce, the lowest for a most-active contract since February 7. Trading was more than double the 100-day average for this time.

For today’s data, the electronic trading gold showed a deferent trend as it gained 0.2% to be traded at $1,265.47 per ounce rising from $1,263.20 per ounce during the morning session.


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Euro Dropped for the 2nd Day as Draghi Speach Yesterday

Trying to rebound over, the euro reached a three-month low against the dollar as European Central Bank President Mario Draghi signaled policy makers are ready to take action in June should they see low inflation becoming entrenched.

The 18 nation currency fell below its 200-day moving average for a second day after protest parties racked up gains across the 28-nation European Union in elections to the bloc’s Parliament. The euro rose to 1.3646 as after falling to 1.3615, the weakest since February 13 and below its 200-day moving average of 1.3639.

The euro has declined since touching a 2 1/2-year high of 1.3993 on May 8, when Draghi said he was comfortable with adding stimulus as soon as next month, denting demand for the currency. He yesterday said the key issue for the ECB right now is the timing of any action. The ECB next meets on June 5.






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Euro Dropped as German Ifo business climate index declined

The euro fell to three month lows against the broadly stronger dollar on Friday after data showing that German business sentiment deteriorated in May added to expectations for easing by the European Central Bank at its upcoming June meeting. The drop in the euro came after a report showed that the

German Ifo business climate index declined to 110.4 in May; the lowest reading this year, from 111.2 in April, indicating that economic activity could slow in coming months.

The data came one day after a report showing that manufacturing activity in the euro zone expanded at the slowest rate in six months in May. Recent comments by senior ECB officials have signaled that the bank is open to acting as soon as June to stop inflation in the currency bloc from falling too low. On Thursday, ECB Governing Council member Jens Weidmann said the bank is prepared to take unconventional measures to counter the risks of low inflation in the euro zone.

The dollar was boosted after data on new home sales added to signs of a recovery in the housing market. The Commerce Department reported that sales of new homes rose by a larger-than-expected 6.4% to 433,000 in April, after two months of decline. Analysts had been expecting a figure of 425,000. March's number was revised up from 384,000 to 407,000.

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Euro Fell as Manufacturing Growth in The Region Slowed

The euro fell for a third day against the greenback before data economists forecast will show manufacturing growth in the region slowed, supporting the case for the European Central Bank to ease policy.

The Federal Reserve Board of Governors agreed at their April policy meeting that the time has come to discuss ways to wrap up monetary stimulus programs, though rate hikes aren't on the drawing board yet, as no inflationary risks have become evident due to ultra-loose policies. The Fed is currently purchasing $45 billion in Treasury and mortgage debt a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses long-term interest rates, weakening the dollar while boosting stock prices on hopes investing and hiring will follow suit. The Fed's current asset-purchasing plan kicked off at $85 billion in 2012, though further tapering will be likely as the economy stands on its own two feet.

Monetary authorities agreed at their April meeting to seek out a mix of tools to normalize monetary policy, though the U.S. central bank didn't spell out exactly when benchmark interest-rate hikes would begin, which watered down the greenback's earlier gains. Euro was down 0.14% at 1.3682 yesterday. Today, the shared currency was at 1.3684 before the drop to 1.3672 during the morning session.

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Pound Rises as Inflation Rates Beat Expectations

The pound rose against the dollar on Tuesday after U.K. inflation rates beat expectations, while investors avoided the greenback head of the Wednesday release of the Federal Reserve's latest policy meeting minutes. Recent U.S. economic reports indicating that the recovery remains uneven have weighed on U.S. Treasury yields, pressuring the dollar, meanwhile in the U.S., investors were turning their attention to the minutes from the Fed’s latest monetary policy meeting on today, as they awaited insight on the central bank's view of the economy. In U.K., Upbeat consumer inflation data out of the U.K. bolstered the pound.

The Office for National Statistics reported earlier that the U.K. consumer price index in April rose 1.8% on year and up from 0.4% in March, beating expectations for 1.7% and 0.3%, respectively. The rise in inflation was due in part to higher transport costs, the ONS said, as airlines pushed up ticket prices in time for the Easter holidays. The ONS also said that U.K. house prices rose by 8.0% in March from a year earlier, slowing from 9.2% in February.

House prices in London jumped 17% in the last 12 month, it added. Cable was traded at 1.6842, up 0.17%, rising from a session low of 1.6802 and recorded a high of 1.6864. Today, the English currency recorded a high of 1.6842 during the morning session rising from 1.6832 as open rate and the lowest during the session.

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Gold was Little Changed as Jewelry Purchases Declined

Gold demand was little changed in the first quarter as jewelry purchases countered declines in investment and central bank buying, the World Gold Council said.

Global demand fell to 1,074.5 metric tons in the quarter, from 1,077.2 tons a year earlier, the London-based council said today in a report. The gain in jewelry usage represented the strongest start to a year since 2005 with buying up about 10 percent in China, the biggest gold consumer. While bar and coin demand slid a combined 39 percent, sales through bullion backed exchange-traded products were the lowest in more than a year.

European central banks agreed to cap sales at 400 tons a year through September, and made a fourth gold agreement yesterday, without a limit on sales. The European Central bank and 20 others said they currently don’t have any plans to dispose of “significant” amounts of the metal.

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Cable Rose as London Housing Boom

Sterling was little changed versus the U.S. dollar as prices for London homes jumped to a record this month. Carney said policy makers “could do more” to tackle the risks of rising house prices. Options include imposing more checks on the affordability of mortgages, limiting types of loans or advising the government to rein in its stimulus program.

Values of homes in London climbed 3.3% from April to an average 592,763 pounds, the property website operator said yesterday. Consumer prices rose 1.7% from a year ago last month, according to the estimate. The inflation rate was 1.6% in March, the lowest since October 2009.

It has been below the BOE’s 2% goal since December, helping to support Carney’s case for keeping the benchmark interest rate at a record-low 0.5 percent, where it’s been since March 2009. Sterling was at $1.6824 yesterday after climbing to $1.6996 on May 6, the highest since August 2009. Today the English currency started the session with a little change at 1.6814 to record a low of 1.6810.

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Euro Weakened as Economic Sentiment Declined

Economic Expectations for Germany have worsened in May 2014. The ZEW Indicator of Economic Sentiment has decreased by 10.1 points and now stands at a level of 33.1 points. The indicator reflecting the expert’s assessment of the current economic situation for Germany has improved by 2.6 points in May, reaching a level of 62.1 points. Economic Expectations for the Eurozone have also lost ground in May.

The respective indicator has declined by 6.0 points and now stands at 55.2 points. The indicator for the current economic situation in the Eurozone has gained 4.9 points, reaching a level of minus 25.6 points in May. The euro had the biggest two-week decline against the dollar since November as increased concern that the area’s economy is struggling to accelerate sparked selloffs in bonds issued by Greece and Portugal.

The euro fell 0.5% last week to $1.3694, making the two-week decline 1.3%, the most since the period ended November 8. Today, the shared currency started at 1.3701 to fluctuate between the morning’s session high at 1.3711 and 1.3689.

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Crude Oil Dropped as Stockpiles Rose in U.S.

West Texas Intermediate slid from a three week high after government data showed U.S. crude inventories expanded as production increased to a 28 year peak. Futures fell as much as 0.6% in New York, the first drop in four days. Crude stockpiles rose to a near record last week as output climbed to the most since 1986, the Energy Information Administration reported earlier this week.

Yesterday, WTI for June delivery declined as much as 63 cents to $101.74 a barrel in electronic trading and was at $102.09, the highest close since April 21. The volume of all futures traded was about 49% above the 100-day average for the time of day. Today, WTI ranged a $0.50 during the morning session recording $102.04 per barrel as the highest price to drop to $101.50 per barrel as the lowest trading price for the session.

WTI may drop next week amid speculation U.S. crude inventories at near-record levels expanded further, a Bloomberg News survey shows. Twelve of 29 analysts and traders, or 41 percent, said futures will decline through May 23 while 10 respondents predict a gain.

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Jobless Claims in U.S. Reach Lowest Level in Seven Years

Gold fell the most in a week as declining U.S. jobless claims signaled a strengthening economy and cut demand for haven assets. The fewest Americans in seven years filed applications for unemployment benefits last week as the labor market continued to improve. Gold prices tumbled 28 percent in 2013, the biggest annual decline since 1981, as equities rallied and the U.S. economy accelerated.

Bullion holdings through exchange-traded products reached the lowest since 2009 this week as some investors lost faith in the metal as a store of value after the Federal Reserve cut stimulus.

Gold futures for June delivery dropped 0.7 percent to $1,296.20 an ounce, heading for the biggest loss since May 7. The metal has rebounded in 2014, climbing 8.6 percent this year through yesterday, as tensions mounted between Ukraine and Russia.

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Cable Advanced after Yesterday Reports

U.K. government bonds advanced, with two-year yields having their biggest two-day decline since June, after a government report showed weekly earnings rose at a slower pace in the three months through March than economists estimated. Derivatives based on the sterling overnight interbank average showed expectations that policy makers will keep borrowing costs unchanged through April 2015.

As recently as yesterday, they showed expectations for an increase in February. U.K. policy makers in their quarterly Inflation Report said while the level of spare capacity in the economy had “narrowed slightly” in the past three months, there “remains scope to make greater inroads into slack before raising Bank Rate.

The pound also dropped versus all against the U.S. dollar as the Office for National Statistics said wages excluding bonuses increased 1.3% in the first quarter, less than the estimate of 1.5%. Jobless claims fell 25,100 in April, versus the 30K decline forecast in a separate survey. The pound fell 0.4% to $1.6767 yesterday after climbing to $1.6996 last week, the highest level since August 2009.

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British Pound Under Expectation for Jobless claim and Inflation Report

The pound’s world beating rally is on hold before Bank of England Governor Mark Carney presents the quarterly Inflation Report today, the pound fell against the U.S. dollar, as an industry report showed a gauge of retail sales unexpectedly rose by the most in three years in April.

The pound slid 0.2% to $1.6824 before rising to 1.3831 during the morning session. The U.K. currency has rallied in the past month as traders bet stronger growth will lead the central bank to bring forward its plans to increases rates. Derivatives based on the sterling overnight interbank average showed expectations policy makers will increase rates by 25 basis points in March, compared with April as recently as last week. The Bank of England’s benchmark interest rate has been at a record-low 0.5 percent since March 2009.

A report today will show the U.K. unemployment rate dropped to 6.8% in the three months through March, a more-than five-year low, according the estimates. Carney is also scheduled to present the central bank’s quarterly Inflation Report, which will include updated economic forecasts.

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WTI Rose Amid Speculation That U.S. Stockpiles Will Declined

West Texas Intermediate climbed to its highest intraday level in two weeks amid speculation that crude stockpiles declined again in the U.S., the world’s biggest oil consumer. Futures advanced as much as 85 cents in New York for a second daily gain. 

Crude supplies previously near a record high probably fell by 1 million barrels last week to 396.6 million. WTI for June delivery rose to as much $101.44 a barrel in electronic trading on the New York Mercantile Exchange, the highest since April 29.

The global oil market will remain “fairly balanced” this year as supply disruptions including delays at the Kashagan field in Kazakhstan prevent the build-up of a surplus, according to the monthly oil market report from the Organization of Petroleum Exporting Countries published today.

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ECB To Be Driven Toward Stimulus Even as Economy Grows

The euro area’s fastest economic growth in three years probably won’t be enough to stop Mario Draghi from easing monetary policy. Even with data this week predicted to show the expansion accelerated in the first quarter, the European Central Bank president looks set to push ahead with measures that could range from rate cuts to liquidity injections. Inflation stuck at less than half the ECB’s goal points to a revival that is still too slow, according to the forecasts.

Draghi is fighting to prevent a prolonged period of subdued price gains from derailing the recovery in the 18-nation currency bloc before it becomes entrenched. His declaration last week that officials are “comfortable” with taking action in June suggests a new policy response is imminent. GDP in the euro area probably climbed 0.4% in the three months through March, according to the estimates. That would be twice as fast as the prior quarter and the highest rate since the beginning of 2011.

The region exited its longest ever recession in the second quarter of last year. The recovery may also struggle to gain traction because of the strength of the euro, which Draghi said is a “cause for serious concern.” The single currency has climbed almost 8% against the dollar since July, curbing the price of imported goods and undermining the competitiveness of euro-area companies. It was little changed at $1.3766 today, near the lowest level in a month.

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Euro Trades Near 1 Month Low as ECB Officials Speak

The euro extended losses against the dollar into a second session on Friday, falling to a one month low at the close, one day after the European Central Bank flagged possible monetary easing as soon as next month.

The euro fell from two and a half year highs against the dollar on Thursday after ECB President Mario Draghi said the bank is “comfortable” with acting to shore up growth and stop inflation from falling too low at its next meeting in June. The comments came after the ECB left rates on hold, as expected. Draghi also said the strength of the euro was “a serious concern” and added that the bank would be closely monitoring exchange rate developments.

The single currency came under additional pressure after data on Friday showed that German exports fell 1.8% from a month earlier in March and the country posted a smaller-than-forecast trade surplus. The U.S. dollar weakened against the other major currencies earlier in the week after Federal Reserve Chair Janet Yellen struck a dovish tone on the economy during testimony to the Joint Economic Committee of Congress.

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Euro Dropped As Policy Makers May Ease in June

With the threat of deflation still stalking euro-area economies that are barely out of recession, the European Central Bank president all but committed himself to providing further stimulus at June’s monetary policy meeting.

After keeping rates at record lows yesterday, Draghi told reporters that the 24-member Governing Council is “comfortable with acting next time.” He underscored that position with comments showing a heightened concern that a rising euro will depress prices and derail the recovery. Draghi’s remarks sent the euro and money-market rates plunging as investors bet the ECB will deliver on its long-standing pledge to act if needed.

The comments were reminiscent of his predecessor, Jean-Claude Trichet, who typically signaled rate increases, though not reductions, a month in advance using the phrase “strong vigilance.” The euro weakened from a 2 1/2-year high against the dollar after European Central Bank President Mario Draghi said policy makers were ready to ease monetary policy in June if needed. The euro dropped 0.5% to $1.3840 after appreciating to $1.3993, the strongest level since Oct. 31, 2011. 

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ECB kept Rates on Hold

The European Central Bank kept interest rates unchanged, giving itself more time to gauge whether the euro-area recovery has reignited inflation.

The outcome was forecast by 56 of 58 economists in a Bloomberg News survey. ECB President Mario Draghi will hold a press conference at 2:30 p.m. local time to explain the decision. The deposit rate and the marginal refinancing rate were left unchanged at zero and 0.75 percent, respectively.

Inflation in the euro area was 0.7 percent in April, according to an initial estimate from the European Union’s statistics office. While that’s up from 0.5 percent in March, it was below economists’ forecasts and compares with the ECB’s goal of just under 2 percent.


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Gold Dropped After Yellen Comments

Gold held below $1,300 an ounce after the biggest one-day drop in three weeks on speculation that the U.S. Federal Reserve will further reduce monetary stimulus as the economy recovers.

Chair Janet Yellen told U.S. lawmakers in Washington yesterday that the world’s largest economy still needs stimulus even as data supported the outlook for faster expansion this year. The central bank has announced cuts to bond-buying at each of the past four meetings.

Gold has rallied 7.5 percent this year in part as tension in Ukraine spurred haven demand. Russian President Vladimir Putin called on separatists in Ukraine to postpone a vote for autonomy and said he’s pulled Russian troops from the country’s border after weeks of tension, as the U.S. said there’s no sign of a withdrawal.

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British Pound Climbs Before BOE Decision

The pound reached the strongest level in nine weeks against the euro before the Bank of England announces its monetary policy decision tomorrow.

The U.K. currency was about 0.1 percent from the highest since August 2009 versus the dollar amid speculation an improving economy will spur the central bank to increase interest rates sooner than it currently predicts. Bank of England governor Mark Carney said last week borrowing costs may remain low due to slack in the labor market. U.K. government bonds were little changed.

The decision will be the first since the jobless rate dropped enough to void Carney’s initial commitment on borrowing costs. Even with unemployment falling, he has pushed back against expectations of an imminent rate increase, saying more spare capacity needs to be absorbed before policy makers can remove stimulus.

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WTI Rises as Crude Stockpiles Drop

WTI crude oil gained for the second day after an industry report showed crude inventories declined in the U.S., the world’s biggest oil consumer. June contract climbed as much as 0.5% as crude stockpiles shrank by 1.82 million barrels last week amid falling supplies at Cushing, Oklahoma.

 

An Energy Information Administration report today is forecast to show inventories at a record high expanded further, according to the estimate. Today, WTI for June delivery rose as much as 46 cents to $99.96 per barrel in electronic trading from $99.78 per barrel.

The volume of all futures traded was about 47 percent below the 100-day average. The EIA report will probably show crude stockpiles expanded by 1.25 million barrels last week to about 400.6 million, as expected. That would be the highest level since the EIA began reporting weekly data in 1982.

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Pound Gains as U.K. Services Expand

The British pound rose the most in four weeks against the dollar as a gauge of U.K services output expanded in April more than analysts forecast, boosting demand for the British currency.

Sterling strengthened versus 13 of its 16 major peers as employment in the services industry increased. U.K. government bonds fell, with 10-year yields climbing the most in a week, before the Bank of England begins its two-day meeting tomorrow to set interest rates. While unemployment is below the level policy makers set to consider increasing borrowing costs, Governor Mark Carney has said rates may remain low for longer due to slack in the jobs market.

Markit’s composite PMI for services and manufacturing rose to 59.2 in April, the highest since November, from 57.8 the previous month and a measure of employment in the services industry jumped to 56 from 53.5.

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Euro Gains on Economic Recovery

The Euro edged up against the dollar as investors avoided the greenback on fears an escalating crisis in Ukraine may drag the Washington into the conflict and dampen recovery, though upbeat data out of the U.S. service sector cushioned the dollar and stabilized it. In U.S. trading, the shared currency was up 0.10% at 1.3883, up from a session low of 1.3865 and off a high of 1.3886.

Investors were paying close attention to events unfolding in Ukraine, after conflict between the government and pro-Russian separatists grew more widespread over the weekend, which weakened the dollar. Elsewhere, profit taking from Friday's upbeat jobs report softened the greenback as well.

The dollar firmed last week after the Labor Department reported that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000, while the unemployment rate dropped to a five-and-a-half year low of 6.3%. Still, concerns that long-term unemployment will remain a problem for the U.S. economy tarnished the otherwise positive jobs report, as the headline jobless rate fell in part due to a drop in the labor force, a sign that many who have been out of work for a long time quit looking for jobs and thus are no longer considered part of the labor pool.

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The Cable Advanced as Signs of Economic Recovery

The pound advanced to the strongest level in more than four years against the dollar this week as signs the U.K. economic recovery is gathering momentum boosted the allure of British assets.

Sterling climbed for a fourth week versus the greenback as data showed growth accelerated in the first quarter and house prices rose at the fastest pace since 2007. 

The Cable advanced against the euro as a purchasing managers index for manufacturing rose more than analysts forecast.Sterling has climbed 5.5 percent in the past six months, as the strengthening recovery fuels speculation the Bank of England will raise borrowing costs sooner than other central banks. 

Euro Advanced as Inflation Accelerated

The euro climbed against the dollar, reaching the strongest level in almost three weeks, amid speculation investors were reducing bets on the European Central Bank unveiling an asset-purchase plan to boost price growth.

The shared currency advanced as a report showed euro-region inflation accelerated. On the other hand, Fed officials led by Chair Janet Yellen repeated long-term inflation expectations remain stable. The Fed, in its unanimous decision, kept its forward guidance on borrowing costs, saying it will consider a “wide range of information” in deciding when to raise the benchmark federal funds rate, or the cost of overnight loans among banks. 

Household purchases, which account for almost 70% of the U.S. economy, grew 0.6% in March and the Institute for Supply Management’s manufacturing index rose to 54.3 last month from 53.7. U.S. Initial jobless claims rose by 14,000 to 344,000 during the week ended 26^th of April, while was expected to fell by 9,000 to 320,000. And the U.S. unemployment rate declined to 6.3%, the lowest since 2009.