Gold strength seen persisting on uncertainty * Silver hits more than three-week high * Platinum, palladium touch two-week highs * SPDR gold holdings rise 1.5 percent on Tuesday (Updates throughout, adds LONDON dateline, byline) By Zandi Shabalala LONDON, Sept 7 (Reuters) – Gold steadied near two-and-a-half-week highs on Wednesday, losing momentum due to profit taking following a rally in the previous session on USA data that weakened the case for a US rate rise soon. It reduced the market’s gains this year to 9.6 percent. The U.S. non-manufacturing new orders index for August fell to its lowest since December 2013. But most investors didn’t expect rates to rise this month, and the jobs report appeared to confirm that.
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“The last two ISM reports have been shockingly weak, and I think the case for the Fed to hike this month becomes increasingly more hard and unlikely”, said Mazen Issa, a senior foreign-exchange strategist at Toronto-Dominion Bank in NY.
The rise in the United States dollar and USA real rates and lower safe have demand have weighed on gold prices in Q3. That’s being reflected in a falling USA dollar, he said.
The Bank of Japan is split on whether to add stimulus at its September 20-21 policy meeting, where central bank Governor Haruhiko Kuroda has said the board will conduct a comprehensive assessment of the effects of its massive stimulus program. In a world where an increasing number of government bonds yield less than zero, high-yielding currencies have become attractive alternatives. Borrowing dollars to buy the real has returned 34% this year, the most among more than 40 currencies tracked by Bloomberg.
The Dow Jones industrial average .DJI closed up 46.16 points, or 0.25 percent, to 18,538.12, the S&P 500 .SPX gained 6.5 points, or 0.3 percent, to 2,186.48 and the Nasdaq Composite .IXICended up 26.01 points, or 0.5 percent, at 5,275.91, a record high. Rates on two-year notes, which tend to be more sensitive to the monetary policy outlook, dropped six basis points to 0.73%. Comments from Fed officials and stronger-than-expected USA data have triggered expectations that the Fed will hike this year.
Spanish 10-year securities rose for a third day even as the probability of a third round of general elections in December increased after Acting Prime Minister Mariano Rajoy lost a second confidence vote in the parliament last week. But it was steady on the day against the dollar at $1.1255 EUR=.
The Japanese stock market is lower on Wednesday after the yen strengthened on weaker-than-expected US economic data and dragged down exporters’ shares.
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ENERGY: Benchmark U.S. crude oil gained 52 cents to $44.96 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the benchmark for global oil prices, rose 92 cents to $47.75 a barrel. “The Saudi oil minister actually talked the market lower, which is going to cost his country billions”.
