Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.25 per cent to 958.37 tonnes on Monday.
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A side effect of this could see worldwide share markets fall sharply in anticipation of a U.S. interest rate hike; such a move would hurt the risk-driven Australian Dollar (currency: AUD) and New Zealand Dollar (currency: NZD).
The U.S. equity benchmark index lost 0.1 percent on Monday as declines in commodity shares offset a rally in drugmakers.
The kiwi was up 0.6 percent at $0.7308 after Reserve Bank of New Zealand Governor Graeme Wheeler said the current interest rate track involves further monetary easing but did not see the need for a rapid series of rate cuts. The 0.7 percent increase in wholesale trade topped economists’ expectations for a rise of 0.1 percent.
Futures on the S&P 500 Index slid 0.1 percent.
Earlier this month, the Reserve Bank of New Zealand cut interest rates by 0.25 basis points – less than expected – to a record low of 2.0%. New York Fed president William Dudley said last week a rate hike would be possible at the Fed’s next policy meeting in September.
The dollar drifted down to 100.11 yen from 100.30 late in NY, while the euro nudged up to $US1.1331.
Caltex Australia said its first-half profit decreased 15 percent from previous year, while underlying profit rose 1 percent. “Despite some signs of improvements in the US economy, particularly in the labor market, a rate hike is probably a 2017 story”.
In commodity markets, oil remained under pressure after shedding 3 per cent yesterday amid worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising United States oil rig count. However, analysts have previously said the chances of suppliers, particularly members of OPEC, agreeing on a deal were limited.
US stocks were little changed on Monday as a drop in oil prices that weighed on the energy sector was offset with a strong showing by biotech stocks.
Biotech stocks received a boost from Pfizer’s $US14 billion acquisition of cancer drug maker Medivation, which jumped almost 20 per cent.
One of Australia’s largest retail landlords, Scentre Group, also reported its profit after tax for the January-to-June period was up 6.6 percent on-year at A$1.154 billion, while revenue fell 5.2 percent to 1.28 billion Australian dollars ($974.10 million). Total revenue declined 33 percent on-year to $580.8 million in first half of 2016. The fuel retailer’s shares are down 0.2%.
AUD/USD is supported around 0.7583 levels and now trading at 0.7630 levels.
The MSCI Asia Pacific Index rose less than 0.1 percent to 139.07 as of 9:11 a.m.in Tokyo, after falling as much as 0.1 percent. The broader All Ordinaries Index is up 13.60 points or 0.24% to 5,625.90.
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The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, rose 0.2 percent as of 4 p.m.in NY as speculation on higher borrowing costs boosted the currency’s appeal.
