Gold prices rose on Monday as the dollar slipped but gains were capped by jitters ahead of a Federal Reserve monetary policy meeting and a rise in US government bond yields.
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Recent weak USA economic data has boosted bets that the Fed will skip the chance to raise rates in the upcoming meeting, but investors will assess Chair Janet Yellen’s speech on Wednesday to see if the central bank plans to hike as soon as December.
“The weakness seen last week (in financials) is attracting attention today”, said Robert Pavlik, chief market strategist at Boston Private Wealth. Banks, utility companies and machinery makers rose.
Instead the yen has risen 15 per cent against the USA dollar and 13 per cent versus the euro so far this year.
The U.S. economy is far from robust, posting a sub-par 1.2percent increase in second quarter gross domestic product.However, Japan, the world’s third-biggest economy, is strugglingeven more, eking out just 0.7 percent growth in the same period.
Russ Koesterich, head of asset allocation with BlackRock’s Global Allocation Fund, said investors do not expect the Fed to raise interest rates.
The energy index .SPNY rose 0.91 percent, recovering from the six-week low it hit last Wednesday, as oil prices climbed more than 2 percent.
The steepening yield curve could mean that 10-year and 30-year bond yields rise. Merck fell 95 cents, or 1.5 percent, to $61.33 after rival Sanofi said it sued the company.
The benchmark Treasury 10-year note yield rose one basis point, or 0.01 percentage point, to 1.70 percent, based on data compiled by Bloomberg.
Brent crude fell 0.4 percent to $45.79 per barrel, while US crude slipped 0.6 percent to $43.05.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent, after major U.S. indexes ended a choppy session almost flat.
The S&P 500 Index climbed 0.65 per cent to 2,148.03 at 10:56 a.m. EDT in NY.
In company news, Apple (AAPL.O) shares shed 1.2% after registering huge gains last week.
SAREPTA SURGING: Sarepta Therapeutics soared $26.29, or 93.4 percent, to $54.44 after the Food and Drug Administration granted tentative approval to its drug Exondys 51, a treatment for a type of muscular dystrophy. Also, it may be reluctant to raise rates, and possibly upset financial markets, ahead of a tightening presidential election on Nov 8. Brent crude, used to price worldwide oils, rose 27 cents to $46.04 a barrel in London.
Spot palladium was up 1.9 per cent at $US682.97, on follow-through strength from data on Friday that showed faster-than-expected growth in United States consumer prices, raising expectations for autocatalyst demand, said Eli Tesfaye, senior market strategist for RJO Futures in Chicago.
METALS: Gold rose $7.60 to $1,317.80 an ounce. South Korea’s Kospi added 0.5 percent to 2,025.71.
Oil rallied on Monday before settling off its highs on skepticism over Venezuela’s bid to talk up a potential OPEC output freeze and on indications, US crude stockpiles had risen last week. The pound picked up slightly at $1.3028. Australia’s stock market suspended trading after a couple of hours because of technical glitches.
CURRENCIES: The dollar fell to 101.66 yen from 102.42 yen.
In late-morning trades, the benchmark Nikkei 225 Index is adding 62.44 points or 0.38 percent to 16,581.73, off a high of 16,591.70 earlier.
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“As a result we’re stuck in a trading range that we probably can’t break out of until you get through the Fed meeting, and you get through probably the debate next Monday, and you get a lot closer to the next round of earnings releases”, Meckler said.
