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Jan 10, 2017

Bloomberg Gold January 10, 2017: Gold Gains as Dollar Recoils in Fading Trump Rally: Markets Wrap

bloomberg.com
 
@natashadoff More stories by Natasha Doff
  • Pound set for worst three-day drop since October on Brexit
  • Investors cautious before Trump meets media on Wednesday

Caution crept into financial markets as the euphoria over Donald Trump’s policies fades, sending gold to a five-week high and leaving stocks and U.S. futures little changed.


Bullion advanced for a second day before the U.S. president-elect’s first news conference since July on Wednesday. The dollar weakened against the yen. The pound was set for its worst three-day drop since October, while the cost of insuring corporate debt against default increased for a fourth day, the longest run since November. A rally in U.K. retailers propelled the FTSE 100 Index toward a ninth straight record close.

Anxiety has crept back into markets in the new year following a burst of optimism that accompanied Trump’s surprise election victory, with investors expressing their concern largely via the currency market. The pound has been hit by angst over the implications of Brexit and the Turkish lira extended its retreat to record lows on speculation the nation’s central bank won’t raise interest rates.
“Traders are wary ahead of a media briefing,” said Naeem Aslam, chief market analyst in London at Think Markets U.K. Ltd. They “want to play safe and the yellow metal provides them this safety.”
Read more from our Markets Live blog here.
Currencies
  • The dollar fell 0.1 percent versus the yen as of 7:42 a.m. in New York.
  • The pound touched its lowest level since Oct. 25 on concern a so-called hard Brexit may push the Bank of England to keep rates lower for longer. The currency was down 0.1 percent at 1.2149 per dollar.
Stocks
  • S&P 500 futures were little changed after closing Friday at an all-time high.
  • Wm Morrison Supermarkets Plc climbed 3.8 percent in the U.K. after reporting better-than-forecast holiday sales.
Commodities
  • West Texas Intermediate crude added 0.2 percent to $52.04 a barrel after sinking 3.8 percent last session as an increase in U.S. drilling offset signs that OPEC members are sticking to planned output cuts.
  • Gold advanced 0.2 percent to $1,183.40 an ounce, with demand forecast to rise ahead of Chinese New Year.
  • Zinc rose 2.7 percent to a three-week high of $2740.50 a metric ton on signs that demand for the metal used to produce galvanize steel would increase in China.
Bonds
  • Yields on 10-year Treasury notes rose one basis point to 2.38 percent. 
  • Mozambique’s dollar bonds due January 2023 plunged to 50 cents on the dollar, an all-time low, on bets the nation won’t settle a coupon payment next week.
  • Bonds in core European countries are little changed, while Italy and Spain extended gains.