Gold and equities climb vs. the dollar in midday trade

Gold(COMEX:GCK14) climbed to the highest price in almost two weeks as a weaker dollar and tension in Ukraine prompted haven demand. U.S. stocks rose as the Nasdaq 100 Index rebounded from its worst three-day slide since 2011.

Gold advanced 0.8 percent to $1,308.60 at 11:08 a.m. in New York. The dollar(NYBOT:DXM14) dropped to the lowest level in more than five months. The Nasdaq 100 index of technology stocks rose 0.9 percent after a 4.3 percent slide since April 2. The Standard & Poor’s 500 Index climbed for the first time in three days, adding 0.3 percent to erase an earlier drop of 0.4 percent. The Stoxx Europe 600 Index slid 0.6 percent, while the MSCI Emerging Markets Index increased 1 percent.

Ukraine sent additional police forces into eastern regions after pro-Russian protesters seized government buildings. In the U.S., technology stocks from Google Inc. to Yahoo Inc. rallied more than 2 percent after a three-day selloff that helped erase the year’s gain in the S&P 500. Alcoa Inc., the biggest U.S. producer of aluminum, reports first-quarter earnings today. Price swings in currency markets have tumbled to a six-year low as central banks from the U.S. to Japan seek to boost growth with cheap cash and record-low interest rates, encouraging investors to seek higher-yielding assets.

“There certainly has been more interest again in emerging markets, suggesting that many investors are again looking out for yield,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London. “That’s clearly a risk-on scenario that is dollar-negative.

Greenback Weakness

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, fell 0.6 percent to 1,008.97, the lowest level since October. The yen advanced 1 percent to 102.10 per dollar and the euro gained 0.4 percent to $1.3794.

The JPMorgan Global FX Volatility Index rose 0.3 percent to 7 percent, after closing at 6.98 percent yesterday, the lowest since July 2007.

A custom Bloomberg index with equal weightings of the dollar’s 20 most-traded emerging-market peers increased to its highest level since Dec. 16.

The weaker dollar “is definitely supporting gold,” Bernard Sin, the head of currency and metal trading at MKS (Switzerland) SA, a Geneva-based refiner, said today by phone.

Gold advanced to the highest level in almost two weeks and has gained 9.1 percent this year, rebounding from the biggest annual drop in more than three decades. Silver rose 0.8 percent to $20.065 an ounce.

Russia called on Ukraine to halt all military preparations in the east “immediately” or risk civil war. The U.S. has said there is evidence that some protesters may be paid provocateurs.

Page 1 of 2 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome