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Gold inches down a day after topping $1,140

Gold slipped on Thursday after reaching a three-week high above $1,140 per ounce the previous day, weighed down by investors’ caution ahead of U.S. non-farm payrolls data for December due later this week.

A possible signal of tighter liquidity by China’s central bank was expected to affect gold less than industrial metals.

“The impact of such news of tightening would be harsher on industrial metals like copper,” said Koichiro Kameim, managing director at financial research firm Market Strategy Institute in Tokyo.

“As for the gold market, the impact would be neutral. Chinese demand in the precious metals would be hardly affected,” he said.

Economic indicators suggest the U.S. economy is recovering, but employment is a key component for shaping the outlook for U.S. interest rates and the dollar’s direction.

Spot gold was at $1,132.80 an ounce by 0623 GMT, down 0.5 percent from New York’s notional close of $1,137.90.

U.S. gold futures for February delivery were at $1,133.40 per ounce, down 0.3 percent.

Spot gold rose as high as $1,140.20 on Wednesday, up 4 percent since the start of the year, on fresh new year investment flows, partly thanks to a rise in Asian currencies against the dollar inspiring buying from the region, traders said.

It is still well below a lifetime high of $1,226.10 struck in early December.

“It’s good to buy gold, oil and stocks as everything is up since the start of the year,” Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said, referring to the recent rally in these asset classes.

Leung said gold could reach $1,500 this year as inflation concerns encourage investor buying, while China’s bright economic outlook means demand from the region as a whole will likely stay strong.

But he was cautious prior to U.S. Labor Department non-farm payrolls data on Friday.

“If the U.S. employment is still improving, it’s a good sign for the recovery in demand and the economy. But if not, they would pull back their money for now,” he said.

The non-farm payrolls data is expected to shape expectations for when the U.S. Federal Reserve will start tightening its ultra-loose monetary policy, which could set the direction of the dollar.

Wednesday’s data on the U.S. private job market did little to change expectations for the more comprehensive data. Economists forecast the United States lost 8,000 jobs overall last month, fewer than 11,000 lost in November.

In the currency market, the dollar was steady on Thursday after falling the previous day when minutes from the Federal Reserve’s latest policy meeting suggested the possibility of more stimulus measures for the economy.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell to 1,123.869 tons as of January 6, down 4.876 tons or 0.4 percent from the previous business day.

Among other precious metals, spot platinum was little changed after matching Wednesday’s high of $1,561 per ounce, a 16-month high, on expectations of higher demand for the metal.

The auto industry, which is expected to pick up this year, accounts for more than half the consumption of platinum.

Also, the first platinum and palladium exchange-traded funds proposed for the United States have cleared a major hurdle with U.S. market regulators bringing the products.

Analysts anticipated a rush of investment dollars into platinum and palladium if the U.S. Securities and Exchange Commission gives its final nod.

Spot palladium rose as high as $428.50 per ounce, its highest since July 2008, before trading down at $423.50.

Jan

06

2010

Asian Stocks, Currencies Rise as Dubai Losses May Be Contained

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Asia stocks and currencies rose as the United Arab Emirates pledged support for its banks, easing concerns that losses from Dubai World will spread. Treasuries and the cost of protecting corporate debt fell.

The MSCI Asia Pacific Index climbed 2.8 percent to 117.14 as of 12:27 p.m. in Tokyo, the biggest gain in almost seven months. South Korea’s won strengthened the most in a month. National Australia Bank Ltd. and Commonwealth Bank of Australia advanced more than 3 percent as they don’t expect “material” losses from Dubai.

Standard & Poor’s 500 Index futures added 0.6 percent after the U.A.E. central bank said lenders will be able to borrow money for half a percentage point above the three-month local benchmark interest rate. The MSCI World Index rose 0.6 percent from a three-week low.

“There is relief that things are not as serious as they might be,” said Matt Riordan, who helps manage about $5.1 billion at Paradice Investment Management in Sydney. “The risk of a serious contagion affecting the global financial system doesn’t now seem likely or probable.”

Finance companies were the biggest boost to the MSCI Asia Pacific Index after Australian lenders denied any “material” losses from Dubai World. National Australia, the country’s third-biggest lender by value, gained 5.2 percent, while Commonwealth Bank rose 3.6 percent. Samsung C&T Corp., builder of the world’s tallest tower in Dubai, added 4.6 percent, rebounding from an 8.1 percent drop on Nov. 27. It stopped work on a $350 million Dubai bridge after payments were halted.

Yen

Sony Corp., the maker of PlayStation gaming consoles, rose 4.2 percent as the yen halted gains that took it to a 14-year high against the dollar, boosting the outlook for Japan’s export revenues. Nissan Motor Co., Japan’s No. 3 automaker, added 3.1 percent.

The yen, which surged to a 14-year high against the greenback last week, declined 0.2 percent to 86.78 to the dollar as investors bought higher-yielding currencies. Japan’s currency weakened against all 16 of the most-traded currencies tracked by Bloomberg.

South Korea’s won rose the most in a month after the Finance Ministry said the nation’s banks have “limited” exposure to Dubai debt at around $88 million. Malaysia’s ringgit gained 0.6 percent to 3.3920 before a government report later this week that will probably show a slump in Malaysia’s exports eased to 10.3 percent in October from 24.2 percent in September, a Bloomberg survey showed.

Currencies

Australia’s currency rose 1.2 percent to 91.67 U.S. cents on speculation the central bank will increase interest rates tomorrow for a record third month. Policy makers will raise the target rate by 25 basis points to 3.75 percent, according to 20 of 21 economists surveyed by Bloomberg News on Nov. 27.

Chinese yuan 12-month non-deliverable forwards rose 0.1 percent to 6.629 per dollar, even after European officials indicated after meetings in Nanjing yesterday that they have failed to shift Chinese policies that peg the yuan to the dollar.

China’s Shanghai Composite Index rose 1 percent, rebounding from a weekly loss, after the government said the nation will maintain stimulus policies next year. The measure plunged 6.4 percent last week, the most in three months, on concern banks will sell shares to replenish capital depleted by loan growth.

U.S. Treasuries fell as global equities climbed. The yield on the benchmark 10-year note increased three basis points to 3.23 percent as in Tokyo, according to BGCantor Market Data. The 3.375 percent security maturing in November 2019 fell 1/4, or $2.50 per $1,000 face amount, to 101 7/32.

Gold, Crude

Gold for immediate delivery was little changed at $1,176.31 an ounce at 9:49 a.m. Singapore time, erasing a 0.8 percent loss, as the U.S. dollar index, which tracks the greenback against currencies of six major U.S. trading partners, dropped 0.4 percent. Gold jumped to a record $1,195.13 on Nov. 26.

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Nov

30

2009

Obama in Asia – building block or bow?

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Barack Obama’s first presidential trip to Asia was also his first big step in recasting U.S. ties with a region in flux, and showed this will demand patience and compromise from a superpower used to pushing its weight around.

In a tone-setting speech in Tokyo, Obama cast his nine-day Asia odyssey as a return to full U.S. engagement, but his trip covering Japan, a regional summit in Singapore, China and South Korea also became a tutorial in the disputes and shifting forces standing in his way.

Above all, in China the U.S. President found its Communist Party leaders glad for the prestige of his presence but showing little public sign of yielding over currency friction, human rights or putting greater weight behind efforts to bottle in the nuclear ambitions of North Korea and Iran.

All that could be cast as a failure, and already has been by Obama’s domestic critics and some commentators.

But U.S. summits with China and the rest of Asia have rarely brought instant rewards and are even less likely to now the U.S. has been wounded by financial crisis and Beijing sees itself as an emerging regional gatekeeper.

Whoever is in the White House, Washington’s dealings with Asia in coming years will look less like a clean sprint and more slog through a muddy obstacle course, with plenty of chances to stumble along the way.

“The United States is a big power that became used to having it’s way,” said Liu Jiangyong, a professor of East Asian security affairs at Tsinghua University in Beijing.

“Just by showing that he’ll listen, Obama has won credit that will give the U.S. a boost (in the region),” he said.

“Especially in the next decade, China and the rest of Asia will be going through huge changes, and the United States will have to adjust.

“President Obama’s visit was a start, but even if he’s happy with it, it showed there’s a lot to be done.”

EASING REGIONAL ANXIETIES

Obama did not start entirely from scratch in Asia.

While President George W. Bush was preoccupied with wars in Afghanistan and Iraq, he avoided major discord with China and other Asian powers.

Many of Obama’s key staff on Asian affairs served in the Clinton administration.

“Especially in the wake of the financial crisis, the United States has faced regional anxieties about its future role in Asia,” said Zhu Feng, a professor of international security at Peking University.

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Nov

20

2009

Citigroup sells stake in Japanese call center

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Citigroup Inc. said Sunday that it is selling its controlling stake in Japan’s leading call center operator, Bellsystem24, to private equity firm Bain Capital Partners in a deal that values the operation at $1.1 billion.

Under terms of the deal, Citi’s private investment unit, Citigroup Capital Partners Japan, will receive $1 billion in cash for its 93.5 percent stake in the call center operator.

New York-based Citigroup in October completed the sale of its Japanese brokerage to Sumitomo Mitsui Banking Corp. in a $8.7 billion deal that advanced the bank’s efforts to restructure after big losses on risky investments.

The bank, one of the hardest hit during the credit crisis and recession, has reported huge losses in the past two years as its investments and consumer loans and credit cards soured. Citigroup received $45 billion in loans from the U.S. government, which now owns a 34 percent stake in the bank. It has also received guarantees to protect against losses on more than $300 billion in risky assets.

As part of its efforts to recover, Citigroup is selling assets it acquired over the years as it became one of the world’s largest players in banking, insurance and financial services.

Bain Capital, which has investments in companies such as Toys “R” Us and Burger King, established offices in Tokyo in 2006.

Nov

16

2009

Global stocks rise, dollar falls after stimulus pledge

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Global stocks rose and the dollar fell on Monday after the Group of 20 pledged to keep stimulus in place until recovery was assured, following data on Friday showing the U.S. unemployment rate rose to a 26-year high.

The MSCI world equity index .MIWD00000PUS rose 0.8 percent in early London trade while European shares .FTEU3 were up 1.2 percent.

That came after Tokyo’s Nikkei share average closed up 0.2 percent .N225 and other Asian shares also gained.

“The markets have not been given any excuse to do a lot of correcting,” said Bernard McAlinden, strategist at NCB Stockbrokers. “At the G20 meeting, the members agreed to keep the stimulus in place.”

The dollar fell broadly as higher-yielding and commodity-linked currencies benefitted from renewed risk-taking sentiment.

“We have positive equity markets so we have risk appetite. And that is still a dollar negative. People are buying into higher-yielding currencies or currencies where rates are going higher,” said Niels Christiensen at Nordea in Copenhagen.

“It’s difficult to pinpoint any reason to hold or buy the dollar. So the dollar is still the preferred funding currency.”

The euro was up 0.8 percent against the dollar at $1.4966. The Australian dollar was up 0.9 percent against the U.S. dollar and the New Zealand dollar was up 1.5 percent.

Bond markets were pressured not only by higher stocks but also ahead of a slew of supply this week, notably the $81 billion from the United States which starts with a sale of $40 billion in three-year notes later in the day.

Yields on 10-year Treasury notes edged up to 3.529 percent in Asian trade, up 2 basis points from late U.S. trade on Friday. They were last at 3.520 percent.

Japanese benchmark 10-year government bond yields surged to a 4-1/2 month high ahead of JGB auctions.

The G20 finance ministers and central bank governors, meeting over the weekend in Scotland, refrained from directly addressing currencies in talks to rebalance the global economy.

The International Monetary Fund said in a report while the dollar had depreciated in recent months, it still remained on the “strong” side, putting pressure on the U.S. unit.

Data on Friday showed U.S. employers cut a larger-than-expected 190,000 jobs in October and the unemployment rate rose to 10.2 percent. The dollar’s fall prompted gold prices to hit a record high. It rose above $1,100 an ounce in Europe on Monday, extending last week’s near 5.0 percent gains.

Oil rose more than $1 to above $78 a barrel on Monday, recouping some of the previous session’s near 3 percent loss, on fears a powerful hurricane would cut U.S. oil and gas supplies and also lifted by the falling dollar.

Nov

10

2009

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