Extending losing streak, gold drops to 2-wk lowREUTERS, Tue Oct 28, 2014 08:02 WIB - Gold fell for a fifth session in a row on Tuesday to its lowest in nearly two weeks as...
Spot gold dropped to $1,222.20 an ounce, its lowest since Oct. 15, before recovering slightly to trade down 0.2 percent at $1,222.58 an ounce by 0039 GMT. The five-day losing streak matches a similar run in August.
The Fed is likely to announce the end of its massive bond-buying stimulus when it wraps up a two-day meeting on Wednesday. Markets, which have been fearing a
sooner-than-expected hike in rates, will be scrutinising any signals about the timing of any rate increase and the central bank's view on the global economy.
Any hike in interest rates could dent the appeal of non-interest-bearing assets such as bullion.
Gold's failure to climb despite weakness in equities and the U.S. dollar shows that the metal could struggle with any rallies, and is probably headed towards the key $1,200 level.
Bullion is seen as a safe-haven asset that usually gets a boost when riskier assets such as equities are out of favour.
Weak economic data also failed to lift gold. U.S. services sector activity dipped to a six-month low in October, while manufacturing output in Texas dipped, pointing to some moderation in economic growth early in the fourth quarter.
In the physical markets, data on Monday showed China's net gold imports from main conduit Hong Kong jumped to a six-month high in September as the world's biggest consumer stocked up ahead of its National Day holiday.
However, imports have slowed since the holiday, traders said, possibly putting more pressure on gold.
A new electronic gold price mechanism is expected to be in operation early in the first quarter of 2015, replacing the century-old gold benchmark, the London Bullion Market Association said on Monday.
Global equity markets slipped on Monday, hit by weak German business sentiment and another decline in oil, while Brazil slumped after incumbent Dilma Rousseff narrowly won a second term over an opponent seen as more pro-business.
0700 Germany Import prices Sep
1230 U.S. Durable goods orders Sep
1300 U.S. S&P/Case-Shiller home prices Aug
1400 U.S. Consumer confidence Oct
Federal Reserve starts two-day policy meeting
Asian shares drift lower, Fed meeting awaitedREUTERS, Tue Oct 28, 2014 07:43 WIB - Asian shares wobbled in early trade on Tuesday, with investors cautious ahead of the...
The Fed is expected to announce the completion of its quantitative easing program after a two-day meeting starting later in the session and will likely reinforce its stated willingness to wait a long while before hiking interest rates after a volatile month in financial markets. "With the end of the asset purchase program a foregone conclusion, speculation is once again mounting about the movement of interest rates," said Evan Lucas, market strategist at IG.
Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed has reason to wait before raising U.S. interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched down about 0.1 percent in early trade, after a lackluster session on Wall Street.
Japan's Nikkei stock average .N225 edged down about 0.2 percent, despite upbeat economic data released before the market open.
Japanese retail sales in September rose 2.3 percent from a year earlier, government data showed, suggesting consumer spending is gradually picking up.
The U.S. dollar edged higher after slipping overnight on expectations of more dovish comments from the Fed.
The dollar crawled about 0.1 percent higher to 107.87 yen, but remained below Monday's nearly three-week high of 108.38.
It was steady on the day against the euro at $1.2701.
The single currency was underpinned by a report released over the weekend that showed that Europe's bank stress tests beat market expectations, with only one in five of the region's top lenders failing at the end of last year, and many have since repaired their finances.
But Germany's closely watched Ifo report of business sentiment on Monday showed the index hit its lowest level in almost two years in October, indicating that Europe's largest economy faces challenges.
U.S. crude CLc1 for December was down about 0.4 percent at $80.65 per barrel after dropping as low as $79.44 on Monday, its lowest level since June 2012, after Goldman Sachs cut its price forecasts. Concerns about weak global demand and booming supply continued to loom over the market.
Spot gold was steady at $1,225.34 an ounce.
Dollar struggles as Fed meeting looms, market subduedREUTERS, Tue Oct 28, 2014 05:53 WIB - The U.S. dollar nursed modest losses early on Tuesday, having slipped broadly in a...
The greenback eased to 107.83 yen, retreating from Monday's near three-week peak of 108.38. It also ceded a bit of ground against the euro, which last traded at $1.2698 off Monday's low of $1.2665.
The common currency had risen as high as $1.2723, but failed to break through resistance around $1.2727, a level representing the 50 percent retracement of its Oct 21-23 fall from $1.2841 to $1.2614.
The Australian dollar popped above 88 U.S. cents again, but remained well within its prevailing $0.8640-$0.8900 range following September's 6.3 percent drop.
Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas dipped, pointing to some moderation in economic growth early in the fourth quarter.
The soft data reinforced expectations that the Fed will reassure markets that any interest rate hikes are a long way off even as it ends its massive bond-buying stimulus.
The Fed kicks off its policy review later on Tuesday and is all but certain to announce the completion of its quantitative easing program when it wraps up its two-day meeting.
"Trade overnight had a very distinctive feeling of 'wait and see'," said Evan Lucas, market strategist at IG."With the end of the asset purchase program a foregone conclusion, speculation is once again mounting about the movement of interest rates."
But with U.S. inflation weak, the European economy stumbling and the dollar on the rise, markets are keen to see if Fed officials will acknowledge risks to their expectations that the U.S. recovery will continue to strengthen.
Highlighting some of that risks, a closely watched report showed German business sentiment in October hit its lowest level in almost two years, suggesting Europe's largest economy could be in for a bumpy ride in the fourth quarter.
Figures showing the ECB spent a mere 1.704 billion euros last week on buying covered bonds also threw up questions on the effectiveness of its new program to foster lending to businesses and thereby supporting the euro zone economy.
If the ECB continues its covered bond purchases at the same rate as in the first week of the new program, it will be many years before it gets to its 600-billion-euro target.
ECB sources said the plan to buy private sector assets may fall short of its goal and pressure is likely to build for bolder action early next year, with government bond purchases an option.
Asia and Europe have little to offer in terms of market-moving economic data on Tuesday, leaving the focus on U.S. durable goods data due later in the day.
Wall St. flat after last week's big gain; energy weighsREUTERS, Tue Oct 28, 2014 03:40 WIB - U.S. stocks ended near flat on Monday, pausing after the S&P 500's biggest weekly...
Among the day's biggest positives, shares of Gilead Sciences (GILD.O) rose 1.7 percent to $112.59, a day ahead of its scheduled earnings release. Micron Technology (MU.O) shares jumped 4 percent to $32.30 and was the largest percentage gainer on both the S&P 500 and Nasdaq 100 after it announced a $1 billion stock repurchase.
But energy shares were by far the day's biggest drag, with the S&P 500 energy index .SPNY falling 2 percent. U.S. crude oil CLc1 briefly traded below $80 a barrel after Goldman Sachs slashed its crude price forecasts, citing abundant supply and lackluster demand.
The S&P 500 ended the day down slightly after closing out its best week since early January 2013, a sharp recovery from the market's recent selloff. The index is now up 5.3 percent from its Oct. 15 low.
"After almost a 10 percent correction on the S&P, the bulls showed up and sent the prices right back up. Now... we're on track for closing in the upper half of the range for the month, which is a bullish sign," said Adam Sarhan, chief executive of Sarhan Capital in New York.
Accommodative central bank policies globally should keep "an underlying bid for stocks," he said.
The Dow Jones industrial average .DJI rose 12.53 points, or 0.07 percent, to 16,817.94, the S&P 500 .SPX lost 2.95 points, or 0.15 percent, to 1,961.63 and the Nasdaq Composite .IXIC added 2.22 points, or 0.05 percent, to 4,485.93.
The majority of companies are beating earnings expectations. With results in from 213 of the S&P 500 companies, 71.4 percent beat analysts' forecasts, which would be highest percentage since the third quarter of 2011, Thomson Reuters data showed.
U.S.-traded shares of Brazilian companies tumbled after President Dilma Rousseff won reelection, defeating market favorite Aecio Neves by a slim margin.
Petrobras ADRs (PBR.N) slumped 13.7 percent to $11.16 and Vale (VALE.N) lost 5.2 percent to $10.58. A Brazilian exchange-traded fund (EWZ.P) dropped 5.4 percent.
After the bell, shares of Twitter (TWTR.N) dropped 9.6 percent to $43.88 after it reported quarterly revenue that surpassed expectations but forecast fourth-quarter sales that may miss targets.
On the S&P 500, the largest decliner was Nabors Industries (NBR.N), down 6.7 percent to $17.48. On the Nasdaq, the largest decliner was Tesla Motors (TSLA.O), down 5.8 percent at $221.67.
Declining NYSE issues outnumbered advancers 1,737 to 1,308, for a 1.33-to-1 ratio on the downside; on the Nasdaq, 1,424 issues fell and 1,235 advanced for a 1.15-to-1 ratio.
The benchmark S&P 500 index posted 53 new 52-week highs and one new low; the Nasdaq Composite recorded 45 new highs and 62 new lows.
About 6.1 billion shares changed hands on U.S. exchanges, below the 8 billion average this month, according to data from BATS Global Markets.
Gold falls on oil drop; Fed meeting in focusREUTERS, Tue Oct 28, 2014 01:32 WIB - Gold dropped on Monday as crude oil prices tumbled, but losses were limited by...
The metal came under pressure after U.S. data showed services sector activity dipped to a six-month low in October, and a sharp pullback in crude oil after Goldman Sachs slashed its price forecasts, citing lackluster global demand.
Gold, however, was underpinned as China's net gold imports from Hong Kong jumped to a six-month high in September.
"Evidence of recovering physical demand in Asia in response to the current low price environment gives confidence that the $1,180 support level may hold," said Jonathan Butler, precious metals strategist at Mitsubishi Corp International.
Spot gold was down 0.1 percent at $1,229.23 an ounce by 2:10 p.m. EDT (1810 GMT), having moved in a narrow range of less than $6. The metal has now dropped in its fourth consecutive session.
U.S. COMEX gold futures for December delivery settled down $2.50 an ounce at $1,229.30. Volume is lighter than usual, preliminary Reuters data showed.
Investors are focusing on the Fed's latest policy statement later this week, in which the U.S. central bank will likely reinforce its stated willingness to wait for a long while before hiking interest rates, after a volatile month in financial markets.
Any sign the Fed will raise interest rates later than currently expected could benefit gold, as it will keep the opportunity cost of holding non-yielding bullion low for longer.
Gold's outlook will depend largely on the two-day Fed meeting to be concluded on Wednesday, when the U.S. central bank is also widely expected to end its bond-buying stimulus program that first began in late 2008 known as quantitative easing (QE).
"Although this is clearly a bearish development for gold as it implies the beginning of monetary policy normalization, it may have already been priced in," said Butler.
Bullion traders were also closely watching investors' positions in gold funds. The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, said its holdings fell 4.5 tonnes to 745.39 tonnes on Friday, a six-year low.
That brought the fund's total outflows last week to 15.5 tonnes, the most of any week since July of last year.
Among other precious metals, silver edged up 0.1 percent to $17.14 an ounce. Platinum rose 0.8 percent to $1,250.50 an ounce and palladium was up 0.8 percent at $782 an ounce.