Billionaire Paulson Sticks With Gold Wager as Prices Rebound

 Billionaire hedge fund manager John Paulson, who cut his gold holdings by more than half in the second quarter, maintained his bet on the metal over the next three months as prices rebounded.

Paulson & Co., the largest investor in the SPDR Gold Trust, the biggest exchange-traded product for the metal, held 10.23 million shares as of Sept. 30, unchanged from June 30, according to a government filing yesterday. Billionaire George Soros took a stake in the Market Vectors Gold Miners ETF.

Global bullion demand tumbled 21 percent last quarter as investors pulled 118.7 metric tons out of ETFs and similar products, World Gold Council data show. Prices that fell into a bear market in April have rebounded 9.1 percent since reaching a 34-month low on June 28 as purchases of coins and jewelry rose. The metal is still headed for its first annual loss since 2000 as equities rallied and inflation failed to accelerate after the Federal Reserve’s unprecedented money printing.

Gold futures in New York declined 23 percent this year to $1,286.30 an ounce, outpacing the 4.6 percent drop for the Standard & Poor’s GSCI Spot Index of 24 commodities. The MSCI All-Country World Index of equities climbed 17 percent, and the Bloomberg Dollar Index gained 3.3 percent. The Bloomberg U.S. Treasury Bond Index declined 2.6 percent.

(Source: Bloomberg)

Gold Advances After Yellen Backs Easing Until Economy Improves

Gold climbed for a second day after Federal Reserve Chairman nominee Janet Yellen backed stimulus until the economy and labor market improves, reducing concern the central bank’s bond-buying program will soon be scaled back. Silver rebounded from the lowest level since August.

Bullion for immediate delivery rose as much as 0.4 percent to $1,287.01 an ounce, and was at $1,284.66 at 8:49 a.m. in Singapore. Prices rose 1.1 percent yesterday, the most since Oct. 22, as the Bloomberg U.S. Dollar Index lost 0.4 percent. The measure of the greenback’s value against 10 currencies fell 0.2 percent today, trimming this year’s advance to 3.1 percent.

Gold lost 23 percent in 2013 as signs of recovery spurred speculation that the Fed will start to cut the $85 billion of monthly bond buying, strengthening the dollar. Yellen said in testimony prepared for her nomination hearing today before the Senate Banking Committee that the economy and labor market are performing “far short of their potential” and must improve before the central bank can begin reducing monetary stimulus.

Gold for delivery in December gained as much as 1.4 percent to $1,286.50 an ounce on the Comex, before trading at $1,284 and ending a five-day losing streak that was the longest since the six days through Aug. 6. Trading volume was 8 percent above the average for the past 100 days at this time.

In China, the second-largest consumer, volumes for cash gold of 99.99 percent purity on the Shanghai Gold Exchange climbed to 15,413 kilograms yesterday, the most since Oct. 11.

(Source: Bloomberg)

Euro Snaps 2-Day Gain Before Factory, Growth Data Amid ECB Bets

 The euro snapped a two-day gain before data this week that may show the region’s factory output dropped and growth slowed, fanning speculation the European Central Bank will take more measures after a rate cut last week.

The yen was near a two-month low before Bank of Japan board member Ryuzo Miyao speaks today amid speculation the central bank will add to stimulus next year. The pound remained lower following a three-day slide before the Bank of England publishes economic forecasts in its quarterly Inflation Report today.

The euro was at $1.3434 at 9:59 a.m. in Tokyo after strengthening 0.5 percent in the previous two days to $1.3436. The yen was little changed at 99.63 per dollar after touching 99.80 yesterday, the weakest since Sept. 13. It traded at 133.83 per euro after a 0.7 percent slide to 133.87 yesterday.

Sterling lost 0.1 percent to $1.5889 after declining 1.2 percent since Nov. 7.

Factory production in the 17-nation euro region probably fell 0.3 percent in September from August, when it rose 1 percent, according to the median estimate of economists in a Bloomberg News survey. The European Union’s statistics office will report the figure today.

That’s followed by data tomorrow probably showing the euro-area economy expanded 0.1 percent in the three months through Sept. 30, based on a separate Bloomberg poll of economists. The region grew 0.3 percent in the second quarter, marking an end to a record-long recession.

(Source: Bloomberg)

Dollar Holds One-Day Retreat Versus Euro as Yellen Hearing Looms

The dollar held a one-day decline versus the euro before Janet Yellen faces a confirmation hearing this week for the top job at the Federal Reserve.

The Bloomberg U.S. Dollar Index yesterday retreated from a two-month high ahead of the Nov. 14 hearing as traders assess whether the economy is strong enough for the Fed to reduce stimulus. A report today is forecast to show confidence among U.S. small businesses fell in October to match the lowest level since April. The pound held five days of gains versus Australia’s currency before the Bank of England publishes new economic and inflation forecasts at a press conference tomorrow.

The dollar traded little changed at $1.3409 per euro as of 8:55 a.m. in Tokyo after falling 0.3 percent to $1.3407 yesterday. It bought 99.15 yen from 99.16 yen. The euro was little changed at 132.96 yen after rising 0.4 percent yesterday.

The pound fetched A$1.7069 after climbing 1.7 percent in the past five sessions.

Yellen, the Fed vice chairman, was nominated by President Barack Obama to succeed Chairman Ben S. Bernanke when his term ends Jan. 31. Pacific Investment Management Co.’s Bill Gross said Nov. 8 he expects Yellen’s Fed to be more accommodative with the economic expansion sluggish and the risk of deflation.

(Source: Bloomberg)