Rising US bond yield and investors mass sell-offs takes glitter off gold
The price of gold dropped by THB250 per baht weight in morning trade on Tuesday, the Gold Traders Association reported. As of 9.28am the buying price of a gold bar was THB26,050 per baht weight and selling price THB26,150, while gold ornaments were THB25,574.92 and THB26,650, respectively.
At close on Monday, the buying price of a gold bar was THB26,300 per baht weight and selling price THB26,400, while gold ornaments were THB25,832.64 and THB26,900, respectively.
Spot gold price on Tuesday was US$1,770 (THB55,263) per ounce compared to Monday when it dropped by $9.6 to $1,770.6 per ounce, due to the rise in US bond yield and mass sell-offs of precious metal after its price had risen continuously.
Hong Kong gold price on Tuesday dropped by HK$140 to $16,380 (THB65,850) per tael, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index closed at 1,574.91 on Monday, up 25.95 points or 1.68 per cent. The volume of total transactions was Bt87.45 billion with an index high of 1,574.97 and a low of 1,552.91.
In the morning session, Krungsri Securities forecast the day’s index would fluctuate between 1,540 and 1,560 points despite positive sentiment from the US Federal Reserve maintaining a low interest rate, and the falling US bond yield.
“However, uncertainty over the Covid-19 outbreak in Thailand after the number of cases rose by over 1,700 on Sunday will impact economic recovery and pressure the index,” said Krungsri Securities.
The caseload fell today to 1,394, offering hope for investors that the latest outbreak is being effectively controlled.
The 10 stocks with the highest trade value today were INTUCH, DELTA, KBANK, SAWAD, CPF, GULF, COM7, ADVANC, SCB and SCGP.
Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 29,685.37, up 2.00 points or 0.0067 per cent.
China’s Shang Hai SE Composite Index closed at 3,477.55, up 50.93 points or 1.49 per cent, while Shenzhen SE Component Index closed at 14,117.80, up 397.05 points or 2.89 per cent.
Hong Kong’s Hang Seng Index closed at 29,106.15, up 136.44 points or 0.47 per cent.
South Korea’s KOSPI closed at 3,198.84, up 0.22 points or 0.0069 per cent.
Taiwan’s TAIEX Index closed at 17,263.28, up 104.47 points or 0.61 per cent.
The Stock Exchange of Thailand (SET) Index rose by 7.87 points, or 0.51 per cent, to 1,556.83 in the morning session on Monday.
A Krungsri Securities analyst forecast that the SET Index would fluctuate between 1,540 and 1,560 points despite positive sentiment from the US Federal Reserve’s resolution to maintain the interest rate at a low level and lower US bond yield.
“However, uncertainty over the Covid-19 outbreak in Thailand after the number of Covid-19 cases increased by over 1,700 cases on Sunday would impact economic recovery and pressure the index,” he said.
He recommended that investors buy:
▪︎ TQM, STGT, COM7, SYNEX, BDMS, BCH and CHG, which benefit from the Covid-19 outbreak.
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
▪︎ HANA, KCE, TU, and CPF, which benefit from the weakening baht.
The SET Index closed at 1,548.96 on Friday, up 7.84 points or 0.51 per cent. Total transactions amounted to Bt89.46 billion with an index high of 1,550.26 and a low of 1,529.29.
The price of gold rose by Bt50 per baht weight in morning trade on Monday, the Gold Traders Association reported.
As of 9.24am, the buying price of a gold bar was Bt26,150 per baht weight and selling price Bt26,250, while gold ornaments were priced at Bt25,681.04 and Bt26,750, respectively.
At close on Saturday, the buying price of a gold bar was Bt26,100 per baht weight and selling price Bt26,200, while gold ornaments cost Bt25,635.56 and Bt26,700, respectively. The price had risen by Bt250 per baht weight last week.
Spot gold price on Monday was US$1,777 (Bt55,474) per ounce compared to Friday when it rose by $13.4 to $1,780.2 per ounce, due to fall in US bond yield, the dollar and bitcoin.
Hong Kong gold price rose by HK$140 to $16,520 (Bt66,367) per tael, the Chinese Gold and Silver Exchange Society reported.
The Stock Exchange of Thailand (SET) Index closed at 1,548.96 on Friday, up 7.84 points or 0.51 per cent. Total transactions amounted to Bt89.46 billion with an index high of 1,550.26 and a low of 1,529.29.
In the morning session, Krungsri Securities forecast the day’s index would fall to between 1,530 and 1,535 points before rebounding, after new cases of Covid-19 in Thailand rose by over 1,500 on Thursday. Krungsri Securities added that negative sentiment from the surge in cases had impacted all aspects of the economy.
“However, the rising oil price in response to Opec’s new forecast that fuel demand would increase this year, together with falling US bond yield, will help the SET rebound,” it said.
The 10 stocks with the highest trade value today were KBANK, PTTEP, PTT, SCC, KCE, CPALL, SCB, OR, COM7 and BBL.
Other Asian indices were on the rise:
Japan’s Nikkei Index closed at 29,683.37, up 40.68 points or 0.14 per cent.
China’s Shang Hai SE Composite Index closed at 3,426.62, up 27.63 points or 0.81 per cent, while the Shenzhen SE Component Index closed at 13,720.74, up 40.47 points or 0.30 per cent.
Hong Kong’s Hang Seng Index closed at 28,969.71, up 176.57 points or 0.61 per cent.
South Korea’s KOSPI closed at 3,198.62, up 4.29 points or 0.13 per cent.
Taiwan’s TAIEX Index closed at 17,158.81, up 82.08 points or 0.48 per cent.
The Stock Exchange of Thailand (SET) Index fell by 7.96 points, or 0.52 per cent, to 1,533.16 in the morning session on Friday as the market reopened after the Songkran holidays.
A Krungsri Securities analyst forecast that the SET would fall to between 1,530 and 1,535 points before rebounding after Covid-19 cases in Thailand increased by over 1,500 on Thursday. He added that this negative sentiment had affected the country’s economy in all aspects.
“However, the rising oil price in response to Opec’s new forecast that fuel demand would increase this year, together with falling US bond yield, would help the SET rebound,” he said.
He suggested that investors buy:
▪︎ PTTEP, PTTGC, TOP and IVL, which benefit from the rising oil price.
▪︎ TQM, STGT, COM7, SYNEX, BDMS, BCH and CHG, which benefit from the Covid-19 outbreak.
▪︎ PSL, TTA and RCL, which would benefit from a rise in the freight rate.
The SET Index had closed at 1,541.12 on Monday, down 25.22 points or 1.61 per cent. Total transactions amounted to Bt78 billion with an index high of 1,562.07 and a low of 1,539.24.
The stock market was closed from Tuesday to Thursday for Songkran.
The price of gold surged by Bt250 per baht weight in morning trade on Friday, the Gold Traders Association reported.
As of 9.25am, the buying price of a gold bar was Bt25,950 per baht weight and selling price Bt26,050, while gold ornaments were priced at Bt25,483.96 and Bt26,550, respectively.
At close on Thursday, the buying price of a gold bar was Bt25,700 per baht weight and selling price Bt25,800, while gold ornaments were Bt25,241.40 and Bt26,300, respectively.
Spot gold price on Thursday rose by $30.5 to $1,766.8 (Bt55,282) per ounce after US bond yield fell to the lowest in four weeks, as well as mass buy-ups of safe-haven assets in response to tensions between US and Russia.
Hong Kong gold price on Friday rose by HK$160 to $16,330 (Bt65,774) per tael, the Chinese Gold and Silver Exchange Society reported.
By Syndication Washington Post, Bloomberg · Claire Ballentine, Katie Greifeld
U.S. stocks jumped to record highs with retail sales and weekly jobless claims data signaling an accelerating recovery in the world’s biggest economy. Yields on benchmark 10-year Treasury notes dropped the most since February.
The S&P 500 advanced to an all-time high, led by the real estate, health care and technology sectors. Financial shares declined with yields falling, even after Citigroup Inc. and Bank of America posted better-than-forecast trading revenue. The Dow Jones industrial average and the Nasdaq 100 indexes also reached all-time peaks.
“The consumer is ready to go out and spend, after nearly a year of lockdowns from covid-19,” said Vanessa Martinez, managing director and partner at the Lerner Group, a Chicago-based wealth management firm. “There is plenty of pent-up demand in the economy.”
The ruble slid as the Biden administration imposed new sanctions on some Russian debt, individuals and entities in retaliation for alleged misconduct related to the SolarWinds hack and the U.S. election. Traders suggested that international concerns may have helped fuel the rally in Treasurys, with many investors caught positioned for higher yields.
“This continues to be one of the more confusing dynamics in markets, at least right now,” said Michael Arone, chief investment strategist for the U.S. SPDR exchange-traded fund business at State Street Global Advisors. “I think part of it is that you saw the 10-year make a very rapid move over a very short period of time, so this could be a pause before it starts to move higher again.”
Expectations of a strong economic recovery, combined with optimism over monetary and fiscal stimulus, have pushed equities to record levels this week as company reporting continues. Still, investors are closely monitoring developments on the vaccine rollout, while also keeping an eye on the threat from rising inflation.
“We are probably entering the last stage of the pricing of the growth acceleration, and we see encouraging signs suggesting the ‘reflationary’ environment can continue and be supportive for risky assets in the near term,” Goldman Sachs Group strategists led by Alessio Rizzi wrote in a note. “Across assets we continue to prefer equity over credit, and favor a pro-cyclical stance within equity.”
Elsewhere, bitcoin gained and Coinbase Global fell even after news that three funds at Cathie Wood’s Ark Investment Management bought shares at Wednesday’s debut of the largest digital asset exchange. Oil edged higher in the wake of Wednesday’s surge.
China economic growth, industrial production and retail sales figures are scheduled to be released Friday.
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These are some of the main moves in financial markets:
Stocks
– The S&P 500 index rose 1.1% to a record high as of 4:02 p.m. New York time
– The Nasdaq composite index rose 1.3%, more than any closing gain since April 5
– The Dow Jones industrial average rose 0.9%, to a record high
– The MSCI World Index rose 0.9%, to a record high
Currencies
– The Bloomberg Dollar Spot index fell 0.1%, falling for the fourth straight day, the longest losing streak since April 6
– The euro was unchanged at $1.20
– The British pound climbed 0.1%, rising for the fourth straight day, the longest winning streak since Feb. 24
– The Japanese yen climbed 0.2%, rising for the fourth straight day, the longest winning streak since Feb. 22
Bonds
– The yield on 10-year Treasurys declined 8.1 basis points, more than any closing loss since Feb. 26
– Germany’s 10-year yield declined 3.2 basis points, more than any closing loss since April 1
– Britain’s 10-year yield declined 6.7 basis points, more than any closing loss since March 2
Commodities
– West Texas Intermediate crude rose 0.3%, climbing for the fourth straight day, the longest winning streak since Feb. 25
By Syndication Washington Post, Bloomberg · Vildana Hajric, Claire Ballentine
U.S. stocks climbed to record highs and bond yields fell as investors bet that a higher-than-forecast rise in inflation won’t be enough to slow economic stimulus measures.
The S&P 500 closed at an all-time high even after the U.S. recommended pausing Johnson & Johnson vaccines amid health concerns. The tech-heavy Nasdaq 100 also set a record while the Dow Jones Industrial Average finished in the red. Consumer prices rose more than expected last month but investors speculated the acceleration was not fast enough to warrant any Federal Reserve policy change. The drop in yields weighed on bank shares.
“The market has been skittish about rates for some time,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “While this may cause some short-term volatility, investors have been pretty steadfast in their faith in a full economic recovery.”
J&J shares fell as officials agreed to the pause and started an investigation into a link from its shot to rare and severe blood clots, while rivals Moderna and Pfizer advanced. The U.S. anticipates having enough other vaccines during the period.
Fund managers across the world now see inflation, a taper tantrum and higher taxes as bigger risks than covid-19, according to the latest Bank of America survey.
“A lot of growth and inflation have already been priced into the market,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “It’s almost as if you need to exceed those expectations in order to see a more pronounced reaction from markets.”
Although policymakers at the Federal Reserve expect a bump in consumer prices to be short-lived, many traders disagree, with fears of faster CPI playing out across duration-heavy assets from bonds to tech stocks.
Treasuries extended gains after the government’s auction of 30-year bonds was greeted with strong demand.
Meanwhile, Bitcoin jumped to an all-time high as the mood in cryptocurrencies turned bullish before Coinbase Global Inc. goes public. Oil traded near $60 a barrel.
These are some of the main moves in financial markets:
Stocks
– The S&P 500 Index increased 0.5% to 4,141.67 as of 4:02 p.m. New York time, the highest on record.
– The Dow Jones Industrial Average was little changed at 33,678.78.
– The Nasdaq 100 Index advanced 1.2% to 13,986.50, the highest on record with the largest gain in a week.
– The Nasdaq Composite Index advanced 1.1% to 13,996.10, the highest in almost eight weeks on the biggest gain in a week.
– The Stoxx Europe 600 Index climbed 0.1% to 435.75.
Currencies
– The Bloomberg Dollar Spot Index dipped 0.2% to 1,139.10, the lowest in three weeks.
– The euro gained 0.3% to $1.1952, the strongest in almost four weeks.
– The British pound advanced 0.1% to $1.3753.
– The Japanese yen appreciated 0.3% to 109.06 per dollar, the strongest in almost three weeks.
Bonds
– The yield on two-year Treasuries decreased one basis point to 0.16%.
– The yield on 10-year Treasuries sank four basis points to 1.62%.
– The yield on 30-year Treasuries declined three basis points to 2.30%.
– Germany’s 10-year yield advanced less than one basis point to -0.29%, the highest in almost two weeks.
– Britain’s 10-year yield dipped one basis point to 0.779%.
Commodities
– West Texas Intermediate crude climbed 1.1% to $60.40 a barrel, the highest in more than a week.
By Syndication Washington Post, Bloomberg · Eric Lam, Yakob Peterseil
Bitcoin jumped to an all-time high as the mood in cryptocurrencies turned bullish ahead of Coinbase Global’s listing this week.
The token rose as much as 5.3% to $63,179, exceeding the previous peak in March. Cryptocurrency-exposed stocks such as Riot Blockchain and Marathon Digital Holdings also advanced in U.S. premarket trading.
Crypto bulls are out in force as growing list of companies embrace Bitcoin, even as skeptics doubt the durability of the boom. In one of the most potent signs of Wall Street’s growing acceptance of cryptocurrencies, Coinbase will list on the Nasdaq on April 14 at a valuation of about $100 billion.
Coinbase’s debut “will mark the first official juncture between the traditional financial avenue and the alternative crypto path,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note. “As such, a successful addition to Nasdaq should act as endorsement of cryptocurrencies by traditional investors.”
Goldman Sachs Group and Morgan Stanley have announced plans to offer their clients access to crypto investments. Tesla earlier this year disclosed a $1.5 billion investment in Bitcoin and more recently started accepting it as payment for electric cars.
Still, skeptics argue that digital coins have been inflated by stimulus that’s also sent stocks to records. Regulators around the world are stepping up oversight and casting doubt on its usefulness as a currency.
Isabel Schnabel, member of the executive board of the European Central Bank, called Bitcoin “a speculative asset without any recognizable fundamental value” in an interview with Der Spiegel this month.
Coinbase’s public debut this week is also boosting the digital coins of other cryptocurrency exchanges, such as Binance Coin, which has jumped to become the third-most valuable cryptocurrency behind Bitcoin and Ether.
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