Gold falls after data-inspired rally; Europe in focus
Gold fell on Monday as bullion investors cashed in some of the previous session's sharp gains to cover losses in U.S. equities, which came under pressure from signs of a U.S. economic slowdown and Europe's debt crisis.
Gold fell on Monday as bullion investors cashed in some of the previous session's sharp gains to cover losses in U.S. equities, which came under pressure from signs of a U.S. economic slowdown and Europe's debt crisis.
The metal, which rallied 4.3 percent on Friday, took a hit from renewed selling on Wall Street as financial markets focused on Tuesday's emergency talks among Group of Seven finance chiefs to discuss the euro zone's woes.
Bullion broke its trend of trading in sync with riskier assets last week with a 3.5 percent rise, after Friday's surprisingly weak U.S. payrolls report stoked talk that further stimulus measures may be necessary to reignite growth. But the metal has so far this year failed to draw sustained safe-haven bids despite the turmoil in Europe and signs of economic slowdown in the United States and China.
Spot gold <XAU=> was down 0.7 percent at $1,614.89 an ounce by 2:21 p.m. EDT (1821 GMT). U.S. COMEX gold futures for August delivery <GCQ2> settled down $8.20 at $1,613.90 an ounce, with volume sharply below its 30-day average and the previous session's turnover.
Euro rises as investors pare bearish bets on euro zone hopes
The euro rebounded from last week's record lows against the dollar and yen on Monday as investors pared bearish bets on hopes that European authorities will seek greater fiscal integration within the euro zone. The euro, which was ripe for a bounce given a recent record high in net speculative short positioning, was buoyed by news that France and the European Commission signaled their support for an ambitious plan to use the euro zone's permanent bailout fund to rescue the bloc's stricken banks.
In a sign of heightened global alarm about strains within the 17-member euro currency area, finance chiefs of the Group of Seven leading industrialized powers will hold emergency talks on the euro zone debt crisis on Tuesday. While European officials are trying to reassure investors they can contain an escalating crisis, many market participants remain bearish on the single currency and believe the euro's strength should prove temporary, especially if yields on Spanish and Italian bonds hover near unsustainable levels.
The euro last traded 0.5 percent higher at $1.2498 <EUR=>, up from $1.2286 on Friday - its lowest since July 2010. Monday's peak of $1.2509 was a four-day high.
Against the yen, the euro <EURJPY=> traded up 0.9 percent at 97.86 yen, well above Friday's 11-1/2-year low of 95.57 yen, according to Reuters data.
S&P 500 ends flat but Europe, U.S. worries weigh
The S&P 500 ended flat on Monday after recent sharp losses, though worries about the European debt crisis and weaker U.S. data kept investors wary of equities. Signs of economic weakness around the globe and Europe's intensifying debt crisis have rattled investors, who have been dumping riskier investments like commodities and equities for the safety of government bonds.
The flat session follows Friday's slide of more than 2 percent that erased the Dow industrial average's gains for the year. The S&P 500 is now up just 1.6 percent for 2012 and is approaching correction territory, which would be a decline of at least 10 percent from its most recent high in April. On Monday, U.S. data showed orders for manufactured goods dropped 0.6 percent in April, its third decline in four months and confounding expectations calling for a 0.2 percent gain.
In a potential boost to markets looking for measures to end the debt crisis, German Chancellor Angela Merkel is pressing for much more ambitious measures, including a central authority to manage euro-area finances and major new powers for the European Commission, European Parliament and European Court of Justice. The S&P financial sector <.GSPF>, seen as most exposed to Europe's debt crisis, was down 1 percent. The S&P's economically sensitive industrial sector <.GSPI> was also down 1 percent, leading the day's declines.
The Nasdaq ended higher, helped by gains in Amazon <AMZN.O>, up 3.1 percent at $214.57.
The Dow Jones industrial average <.DJI> slipped 17.11 points, or 0.14 percent, to 12,101.46 at the close. The Standard & Poor's 500 Index <.SPX> inched up just 0.14 of a point, or 0.01 percent, to 1,278.18. The Nasdaq Composite Index <.IXIC> rose 12.53 points, or 0.46 percent, to close at 2,760.01.
US crude ends higher on euro, bargain hunting
U.S. crude futures rebounded on Monday after four days of losses and last week's slide of 8.4 percent, as the euro rallied on hopes that European authorities can contain the euro zone debt crisis.
Bargain hunting also encouraged some buyers to step back in, after the recent sell-off had dragged prices to near eight-month lows and, according to a technical indicator, put the market in a sharply oversold condition.
Ahead of weekly inventory reports, domestic crude stockpiles were forecast to have fallen by 900,000 barrels in the week to June 1. That would snap 10 straight weeks of builds in government stocks data, with analysts citing lower imports.
On the New York Mercantile Exchange, crude for July delivery <CLN2> settled at $83.98 a barrel, gaining 75 cents, or 0.9 percent. It earlier dropped to a session low of $81.21, the lowest since Oct. 6. In London, ICE Brent crude for July delivery <LCON2> settled at $98.85 a barrel, rising 42 cents, or 0.43 percent. It dropped early to a session trough of $95.63, its lowest since Jan. 26, 2011.
Nikkei set to rebound ahead of emergency G7 talks
Japanese shares are expected to rebound on Tuesday after the Topix <.TOPX> index plumbed a near 30-year low the session before, with investors looking to cut bearish bets ahead of emergency talks by the Group of Seven leading indistrialized powers.
The Nikkei share average
<.N225> is likely to trade between 8,300 and 8,400 after shedding
1.7 percent to a six-month closing low at 8,295.63 on Monday,
strategists said. The broader Topix fell 1.9 percent to 695.51 on
Monday, its lowest in more than 28 years. Nikkei futures in
Chicago <0#NIY:> closed at 8,335 on Monday, up 0.5 percent from
the Osaka <JNIc1> close of 8,290.
"The Nikkei is at a
critical level. Its November low of 8,134 is extremely important," said
Eiji Kinouchi, chief technical analyst at Daiwa Securities. "I
think that support level will likely hold. It's interesting to see what
the G7 will discuss ahead of the ECB (European Central Bank) meeting
tomorrow. They may put pressure on the ECB to do something and such
expectations will help support stocks."
The emergency talks
by the G7 finance chiefs on Tuesday come as alarm is intensifying over
strains in the 17-nation European currency area. The benchmark
Nikkei has fallen 19.1 percent since hitting a one-year peak on March 27
on concerns over the deepening euro zone debt crisis and slowing global
growth.
Seoul shares seen rangebound, eyes on G7 meeting
Seoul shares are seen rangebound on Monday as investors look to emergency talks by the Group of Seven leading industrialised nations, and technical support cushions a beaten-down market hovering just above its annual low. "The corrections on (Monday) were a little too exaggerated so the pace of decline may brake significantly today, although another poor data showing from the United States could pressure the market," said Lee Eun-taek, an analyst at Dongbu Securities.
Seoul shares seen rangebound, eyes on G7 meeting
Seoul shares are seen rangebound on Monday as investors look to emergency talks by the Group of Seven leading industrialised nations, and technical support cushions a beaten-down market hovering just above its annual low. "The corrections on (Monday) were a little too exaggerated so the pace of decline may brake significantly today, although another poor data showing from the United States could pressure the market," said Lee Eun-taek, an analyst at Dongbu Securities.
Adding more fuel to worries about an uncertain global growth outlook,
U.S. data released on Monday showed orders for manufactured goods fell
in April, missing expectations for a rise. Battered investor
confidence could receive a much needed boost when the chiefs of the G7
countries meet to discuss the euro zone debt crisis on Tuesday amidst
heightened global alarm about strains in the single currency bloc.
The Korea Composite Stock Price Index (KOSPI) <.KS11> fell 2.8 percent to close at 1,783.13 points on Monday. South Korea's financial markets will be closed on Wednesday for a public holiday.
Hong Kong stocks set to rise 1 percent at open
Battered Hong Kong shares are set to open firmer on Tuesday, partly on short-covering ahead of emergency G7 talks on the euro zone debt crisis, though investors remain reluctant to take on fresh positions amid an increasingly gloomy global outlook. The Hang Seng index <.HSI> was set to open up just over 1 percent at 18,373.22. The China Enterprises index <.HSCE> of top locally listed mainland firms was indicated to open up 0.8 percent.
