Radio Show Newsletter
WORLD FINANCIAL REPORT ON RADIO JANUARY 3RD 2019
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: U.S. stocks log worst year since 2008. 2018 marks the first time since 1978 that the Dow finished out the year in the red after rising in the first three quarters, and the first for the S&P 500 since 1948. For Nasdaq, it is only the second time in its history it failed to defend January-to-September gains through the end of the year, the last time being 1987, according to the Dow Jones Market Data group. Read more here-https://on.mktw.net/2EYSBx8 and https://on.mktw.net/2AprMPw
-CHART OF THE WEEK: Key Fed Yield Gauge Points to Rate Cuts for First Time Since 2008. Some of the most accurate gauges of economic health are pricing in lower Fed rates for the first time in more than a decade. The little-known near-term forward spread, which reflects the difference between the forward rate implied by Treasury bills six quarters from now and the current three-month yield, fell into negative territory on Wednesday for the first time since March 2008. Two-year yields dipped below those on one-year paper in December.
“This is a crystal ball, it’s telling you about the future and what the market thinks of the Fed and what it will do with its policy rate,” Tony Crescenzi, market strategist and portfolio manager at Pimco, said in an interview with Bloomberg TV. “The market is predicting a rate cut at the beginning part of next year.” Federal Reserve economists said looking at forward rates relative to those on current Treasury bills has served traders well in the past.
“When market participants expected and priced in a monetary policy easing over the next 18 months, their fears were validated more often than not,” Eric C. Engstrom and Steven A. Sharpe wrote in a research paper dated July 2018. When the near-term forward spread turns negative, it indicates bets on easier policy “over the next several quarters, presumably because they expect monetary policymakers to respond to the threat or onset of a recession,” they wrote. Money markets have been paring back expectations of rate hikes as economic data weaken and equities whipsaw. Last week, traders priced in no move in the Federal Funds rate this year and more than a 50 percent chance of a rate cut in 2020. Bloomberg
-CHART OF THE WEEK: OPEC Output Falls Most in Almost 2 Years as Saudi Cuts Begin. Before its agreement to cut oil supplies even started, OPEC’s production plunged by the most in almost two years last month. In a sign of the urgency felt by the cartel amid tumbling crude prices, leading member Saudi Arabia throttled back production, according to a Bloomberg survey of officials, analysts and ship-tracking data. The group’s pact to curb output only formally started this week.
The kingdom’s deliberate cutbacks were compounded by unplanned losses in Iran, which is being targeted by U.S. sanctions, and in Libya, where protests halted the biggest oil field. As a result, oil output from the Organization of Petroleum Exporting Countries fell 530,000 barrels a day to 32.6 million a day last month. It’s the sharpest pullback since January 2017, when the group first embarked on its strategy to clear the glut created by rising supplies of U.S. shale oil. A global coalition of oil producers known as OPEC+, which comprises both members of the group and other exporters including Russia, agreed on Dec. 7 to reduce output during the first six months of 2019. Crude prices failed to rally however, and instead slumped to the lowest in more than a year. Bloomberg
-CHART OF THE WEEK: Sydney Housing Slump Deepens as Prices Drop Most Since 1980s. The downturn in Sydney’s property market is set to deepen this year as tighter lending standards and the worst slump in values since the late 1980s cause nervous buyers to sit on the sidelines. Average Sydney home values have fallen 11.1 percent since their 2017 peak, according to CoreLogic Inc. data released Wednesday surpassing the 9.6 percent top-to-bottom decline when Australia was on the cusp of entering its last recession. Nationwide, dwelling values declined 4.8 percent in 2018, marking the weakest housing market conditions since 2008, CoreLogic said. “Access to finance is likely to remain the most significant barrier to an improvement in housing market conditions in 2019,” CoreLogic’s head of research Tim Lawless said. Weak consumer sentiment toward the property market is “likely to continue to dampen housing demand.” Bloomberg
-CHART OF THE WEEK: Crypto Technicals Flashing ‘Buy’ as Digital Diehards Begin Anew. After a punishing year, cryptocurrency enthusiasts looking for a fresh start in 2019 are being greeted by some positive technical signals. The GTI Vera Convergence Divergence indicator is suggesting Bitcoin is in its longest buying streak in six months. Should buying pressure persist as it has over the past 13 days, Bitcoin could continue to see a rise in prices following last year’s 74 percent decline, the measure predicts.
“Usually the best thing to do is to buy low and sell high. So if we are going by technical analysis we can very easily see on the chart that we are much closer to the bottom than we are to the top,” said Mati Greenspan, senior market analyst at eToro in Tel Aviv. “I’m seeing an industry that is growing at a very rapid pace right now where we see companies that are involved in Bitcoin and blockchain hiring at a rapid rate,” Greenspan said. “We see new projects coming online. We see all kind of indication that people are getting more and more involved in the market.” Bloomberg
-In addition to weak economic data in China, investors are also wrestling with overhang of a partial U.S. government shutdown that’s into a 12th day. With the next session of Congress set to open tomorrow with Democrats in charge of the House, U.S. President Donald Trump invited House Democrat Leader Nancy Pelosi to “make a deal” in a tweet yesterday and has opened the door to a meeting with Congressional leaders today. BNNBloomberg
-Trump says there was a stock market ‘glitch’ in December, but it will rise when trade deals fixed. The S&P 500 dropped more than 9 percent last month to notch its worst December performance since 1931. Those losses also pushed the broad stock index to its worst annual performance since 2008 when it plunged more than 38 percent. For 2018, the S&P 500 pulled back 6.2 percent. CNBC
-Investors are bailing out of mutual funds as if it were 2008. Mutual funds suffered redemptions of $56.2 billion in the week ended Dec. 19. That’s the biggest outflow since the week ended Oct. 15, 2008, according to data released Wednesday by the Investment Company Institute. Bloomberg
-Hedge fund all-star David Einhorn posts his worst year ever, losing 34% in 2018. Greenlight Capital’s main fund lost 9 percent in December, bringing its decline for 2018 to 34 percent. Greenlight’s largest holdings include General Motors, insurer Brighthouse Financial and homebuilder Green Brick Partners, which all struggled in 2018, bleeding as much as 47 percent. CNBC
-Cannabis short sellers made $432 million in December as stock prices tumbled, with Aphria Inc. in particular seeing a surge in both short interest and shares shorted amid ongoing questions about its financial dealings. Bloomberg
-The Canadian Centre for Policy Alternatives is out with its annual reminder of wage disparity, saying the country’s top CEOs will earn the average Canadian salary by 11:33 (Wednesday) this morning. BNNBloomberg
-A malware attack resulted in delivery delays and other production problems for several major U.S. newspapers on Saturday. Tribune Publishing says it reported the incident to the FBI. BNNBloomberg
-A new poll indicates paying down debt is the top personal finance priority for Canadians heading into the new year. It’s the ninth straight year CIBC’s polling has shown Canadians are putting their balance sheets at the top of their to-do lists. Amazingly, just six per cent of respondents say saving for retirement is their top priority; and of the 29 per cent of respondents who say they took on more debt in 2018, 34 per cent say they did so to cover day-to-day bills. BNNBloomberg
-The eurozone is moving to stop printing 500-euro banknotes, the violet-coloured bills that authorities fear are favoured by criminals, with most of the 19 nations in the currency bloc to halt issuing them next month. “As of 27 January 2019, 17 of the 19 national central banks in the euro area will no longer issue 500-euro banknotes,” the European Central Bank said on its website. The ECB announced in May 2016 that it would halt issuing new 500-euro notes, saying at the time that it expected to do so around the end of 2018, due to “concerns that this banknote could facilitate illicit activities”.
The largest denomination banknote in the single currency area is one of the world’s most valuable bills, alongside the 1,000 Swiss franc ($1,017, 888 euros) note. Because of its high value and portability, experts believe the 500-euro note had become prized by criminals for money laundering and even terrorist financing, earning the nickname “Bin Laden” in some circles. According to ECB statistics, 500-euro bills account for just 2.4 percent of the total number of banknotes in circulation, but a little over 20 percent of the total value. At the end of November there were 521 million of the banknotes in circulation. France24.com
-Merry Christmas: Federal Debt Up $1.37 Trillion Since Last Dec. 25; $10,743 Per Household. The federal government has added another $1,370,760,684,441.54 to the debt since last December 25, according to numbers published by the U.S. Treasury. On Dec. 25, 2017, the federal debt was 20,492,874,492,282.58, according to the Treasury. According to the latest numbers published by the Treasury, which show where the debt stood on Dec. 20, 2018, the federal debt was $21,863,635,176,724.12. According to the Census Bureau, the population of the United States as of this month is 328,082,386. That means the $1,370,760,684,441.54 Christmas-to-Christmas increase in the debt equals approximately $4,178.10 per person. The Census Bureau estimates there were 127,586,000 households in the United States in 2018. That means the $1,370,760,684,441.54 Christmas-to-Christmas increase in the debt equals approximately $10,743.82 per household. Read more here-http://bit.ly/2s7O0Rn
-The U.S.’s interest payments are about to skyrocket. Does it matter? The Fed’s interest rate hikes are doing more than hitting consumers in the credit cards. They’re also making it much more expensive for the U.S. to carry its debt load. While they’re not currently a subject of President Trump’s Twitter outrage, America’s interest payments have become a point of concern for some on Wall Street. Those payments are projected to triple to more than $600 billion by 2023, reflecting rising interest rates as well as the exploding deficit. That figure approaches the amount the U.S. spends on national defense every year, and dwarfs what it spends on agriculture, Medicaid, income security and veterans’ programs, to name just a few. “Rarely have deficits risen when the economy is booming.
And never in modern U.S. history have deficits been so high outside of a war or recession (or their aftermath),” the Committee for a Responsible Federal Budget wrote in a recent blog post. In the first full year of Donald Trump’s presidency, the federal deficit rose to its highest level in six years. Next year, it’s projected to rise even higher. Is this historic abnormality a problem? Some economists think so. The Congressional Budget Office warned about the debt in its latest budget projection. “High and rising debt would have serious negative consequences for the budget and the nation,” the CBO wrote, adding that high debt makes a fiscal crisis more likely and leaves less room for lawmakers to change tax and spending policies to help solve a crisis. Former Trump White House Economic Adviser Gary Cohn echoed these fears last week.
“We have a huge debt and deficit problem,” Cohn said on “CBS This Morning,” while claiming the deficit was unrelated to the substantial tax cuts he orchestrated last year. A recent Moody’s analysis noted that persistent high debt, among other factors, would lead to “persistent deterioration in the U.S.’s fiscal strength over the next 10 years.” Because it’s the world’s largest economy and the dollar is the world’s favorite reserve currency, the U.S. is better positioned to withstand debt levels that might send a smaller economy reeling, William Foster, senior credit officer at Moody’s, told CBS MoneyWatch. But it still wouldn’t be great for the country’s long-term financial health. “We don’t know how that would impact the U.S., but it would impact the [credit] rating itself, potentially,” Foster said. Read more here-https://cbsn.ws/2CK3bGB
-Federal budget won’t be balanced until 2040, Finance Department says. The federal budget won’t be balanced until at least 2040, the Finance Department said Friday, providing fresh figures for parties looking to position themselves with voters as the best stewards of the public purse. Federal officials estimate it will take another 22 years to get a balanced budget five years earlier than the Liberal government predicted last year if there are no major economic shocks or new government spending. Long-term budgetary projections suggest that by the end of fiscal year 2040-2041, federal books will be in surplus by $1.7 billion, based on current assumptions for how the economy will grow and expectations that Liberal programs to help boost business investment will yield a financial windfall for the country and for federal coffers.
All the assumptions make the figures “subject to a fair degree of uncertainty,” the report warned. The Trudeau Liberals promised during the 2015 election to balance the books by the end of their mandate 2019 after running annual deficits of about $10 billion. Instead, the deficit figures rose sharply and federal books are expected to finish this fiscal year, which ends in March, with a shortfall of $18.1 billion. The annual update on the long-term outlook for federal finances says that if things go better than expected, the budget could be balanced or almost so by 2024.
If the economy doesn’t grow as fast as predicted and there are already signs an economic slowdown is on the horizon then the deficit could get worse until 2034. “We’re at the peak of the global economic cycle. This is as good as it gets,” Conservative finance critic Pierre Poilievre said. “If the federal government is running a $20 billion shortfall in its best year, then imagine how dreadful the situation will be in its worst year. It would be like if you had your best year at work and you also max out your credit card.” The government’s debt stood at $669.5 billion as of October. According to Friday’s federal projections, that figure will peak at almost $960 billion in the same year the budget reaches balance. Read more here-http://bit.ly/2R7jzKp
-Roubini: President Trump is flirting with mutually assured economic destruction. Now that financial markets see the danger of the Trump presidency, the risk of a financial crisis and global recession has grown. Financial markets have finally awoken to the fact that Donald Trump is U.S. president. Given that the world has endured two years of reckless tweets and public statements by the world’s most powerful man, the obvious question is: what took so long? For one thing, until now, investors had bought into the argument that Trump is all bark and no bite. They were willing to give him the benefit of the doubt as long as he pursued tax cuts, deregulation, and other policies beneficial to the corporate sector and shareholders.
And many trusted that at the end of the day, the “adults in the room” would restrain Trump and ensure that the administration’s policies didn’t jump the guardrails of orthodoxy. These assumptions were more or less vindicated during Trump’s first year in office, when economic growth and an expected increase in corporate profits owing to forthcoming tax cuts and deregulation resulted in strong stock-market performance. In 2017, U.S. stock indexes rose more than 20%. But things changed radically in 2018, and especially in the last few months.
Despite corporate earnings growing by over 20% (thanks to the tax cuts), U.S. equity markets moved sideways for most of the year, and have now taken a sharp turn south. At this point, broad indexes are in correction territory (meaning a 10% drop from the recent peak), and indexes of tech stocks, such as the Nasdaq, are in bear-market territory (a drop of 20% or more). Though financial markets’ higher volatility reflects concerns about China, Italy and other eurozone economies, and key emerging economies, most of the recent turmoil is due to Trump.
The year started with the enactment of a reckless tax cut that pushed up long-term interest rates and created a sugar high in an economy already close to full employment. As early as February, growing concerns about inflation rising above the Federal Reserve’s 2% target led to the year’s first risk-off. Then came Trump’s trade wars with China and other key U.S. trade partners. Market worries about the administration’s protectionist policies have waxed and waned throughout the year, but they are now reaching a new peak. The latest U.S. actions against China seem to auger a broader trade, economic and geopolitical cold war. Read more here-https://on.mktw.net/2QgV6g3
-Florida school shooting voted top news story in AP survey. The mass shooting at a Parkland, Florida, high school which killed 17 students and staff, and sparked nationwide student-led marches for gun control — was the top news story of 2018, according to The Associated Press’ annual poll of U.S. editors and news directors. The No. 2 story was the investigation by special counsel Robert Mueller into whether Donald Trump’s election campaign coordinated with Russia.
It was one of several major stories in a year jam-packed with dramatic developments in which the U.S. president played a role. A year ago, the surge of #MeToo sexual misconduct allegations that toppled many powerful men was voted the top news story of 2017. The continuing momentum of #MeToo in 2018 was this year’s No. 3 story. The first AP top-stories poll was conducted in 1936, when editors chose the abdication of Britain’s King Edward VIII. Here are 2018′s top 10 stories, in order:
Parkland school shooting: It happened on Valentine’s Day an act of senseless hate by a gunman with a semi-automatic rifle who killed 14 students and three staff members at Marjory Stoneman Douglas High School. Previous mass shootings had prompted passionate calls for tighter gun-control laws, but this time was different. A group of student survivors at the school, soon joined by allies nationwide, launched the March for Our Lives movement that organized massive walkouts and peaceful protests at schools across the country. The movement remains active, and has helped energize the broader campaign for tougher gun laws. Read more here-http://bit.ly/2TnQoPx
-Bettor Wins $100,000 After Placing $5 on 15-Leg Parlay Bet. Read more here-http://bit.ly/2GRaHUd
-The Best Investments of 2018? Art, Wine and Cars Luxury assets have outperformed stocks and bonds this year. Who beat the market this year? Investors who like the finer things in life. Luxury assets, including wine, art, classic cars and fancy colored diamonds, have outperformed stocks and bonds this year. “People are looking for a place for their cash, and the security of holding something physical is appealing,” said Anthony Maxwell, director at Liv-ex, the London-based wine exchange. “They are looking outside securities, and gold is not what it used to be.” Investors who put money into art at the beginning of the year saw an average gain of 10.6% by the end of November, according to Art Market Research’s Art 100 Index, the closest thing the industry has to a benchmark.
In November, David Hockney’s painting of a man in a pink jacket by a swimming pool set a record for a living artist at auction, selling for $90.3 million at Christie’s New York. Those investing in wine have seen a 10.2% gain this year, according to the Liv-ex 1000 index, a broad measure that covers wines across regions. Meanwhile, global stocks have tanked in the past quarter, reversing gains earlier in the year, as analysts fret over slowing global growth and trade tensions between the U.S. and China. Investors who put money in the S&P 500 at the beginning of the year have lost 5.1%, based on estimates of total return. Those seeking refuge in cash equivalents have gained 1.9% this year, while those holding gold have lost 2.2%. Yet, the fall in stocks is a recent trend.
Analysts say equity markets may well strengthen in the coming months, while the trend for luxury investments could reverse. “Wine is something to drink and enjoy, and art is something to appreciate,” said Robin Creswell, managing principal at Payden & Rygel, a Los Angeles-based asset manager. “You might enjoy the updraft of higher prices in beneficial markets but you shouldn’t be surprised if there is a downdraft.” Meanwhile, those who own luxury investments can revel in their relative staying power. “They will always have some sort of market because somebody loves them,” said Andrew Shirley, a partner at global real-estate consulting firm Knight Frank and editor of the group’s Wealth Report.
“With a share, there is no sense in owning it for the sake of owning it.” The market for high-end diamonds has been steady, gaining 0.4% in value in the first three quarters of 2018, according to the Fancy Color Research Foundation in Tel Aviv. Eden Rachminov, chairman of the FCRF, a diamond-industry body, says the gemstones can help diversify an investment portfolio and there is almost no volatility in prices. There are risks involved in holding alternative assets, from regulatory reform to changing tastes, such as a recent shift in demand beyond traditional Bordeaux wines to top-end Burgundy and other varieties. And the wealth effect that people feel from higher stock markets can reverse itself quickly.
“If people make money on the stock market, they have more money to spend on their hobby,” said Dietrich Hatlapa, director of Historic Automobile Group International. Luxury-car prices were down slightly this year, according to HAGI’s Top Index, which covers rare collectors’ automobiles a correction, Mr. Hatlapa says, that was expected given the rate at which investors poured money into the vintage-car market following the 2008 financial crisis. “They decided to allocate more to classic cars as part of their portfolio because they couldn’t find returns elsewhere, but there are more alternatives as interest rates normalize,” he added. Cars have been the best-performing luxury investment over the past 10 years, gaining 289%, according to a report published by Knight Frank earlier this year.
Coins gained around 182%, wine 147% and jewelry 125% over the same period, while antique furniture and Chinese ceramics lost value. Emerging markets represent a large part of demand growth for luxury assets, leaving prices vulnerable to moves in currency markets too, analysts say. Wine analysts point to the boom that followed the United Kingdom’s decision in 2016 to leave the European Union. Political uncertainty over Brexit dragged on sterling, the main currency for trade in wine, creating a buying opportunity for international investors. WSJ
-The Biggest and Priciest Diamonds of 2018. The 910-carat Lesotho Legend, which Gem Diamonds recovered in January, claims the top spot this year. The D-color, type IIa stone which the miner says is the fifth-largest gem-quality diamond ever found sold to Samir Gems for $40 million. Dominion Diamond Mines unearthed a 553-carat yellow diamond at the Diavik mine, its joint venture with Rio Tinto, in December. The company claims the chicken-egg-sized stone is the largest known gem-quality diamond found in North America. In April, Lucara Diamond Corp. recovered a 472-carat, light-brown, gem-quality diamond, the third-largest it has ever produced from its Karowe mine in Botswana.
Later that month, Lucara also mined a 327-carat, white gem-quality stone from Karowe, its eighth over 100 carats this year. A 169-carat find by Gem Diamonds rounds out the list. The white, type IIa diamond was recovered from the Letšeng mine in Lesotho in March. The top-selling piece at auction this year was the Pink Legacy, a rectangular-cut, 18.96-carat, fancy-vivid-pink diamond, which sold to Harry Winston for $50.4 million at Christie’s Geneva Magnificent Jewels sale in November. The diamond set a world record for average price for a pink diamond at auction, fetching $2.7 million per carat. A natural-pearl and diamond pendant that once belonged to Marie Antoinette sold for more than 18 times its high presale estimate, going for $36.2 million at Sotheby’s Geneva auction in November.
A pear-shaped, 8.01-carat, fancy-vivid-blue, internally flawless diamond necklace by Moussaieff comes in third, raking in $20.5 million at Christie’s Magnificent Jewels auction in Hong Kong in May. The piece achieved $2.6 million per carat. The fourth-highest seller this year was also sold by Christie’s, at its December Magnificent Jewels auction in New York. The cushion-cut, 8.08-carat, fancy-vivid-blue Bulgari diamond ring went for $18.3 million. Finally, the Ai diamond, named after the Chinese word for love, captures the fifth spot. The step-cut, 5-carat, fancy-vivid-blue stone went for $13.8 million $2.8 million per carat at Sotheby’s Hong Kong auction in October. Read more here-http://bit.ly/2Qi0jo3
-From Marie Antoinette’s Pendant to a 102-Carat Diamond, 5 Epic Gems That Sold in 2018. We revisit the jewels that dominated the auctions this year. In Geneva this past November, Christie’s sold the nearly 19-carat Pink Legacy diamond for more than $50 million several million more than its estimated sale price. The rectangular-cut diamond which, at the time of the auction was set into a ring is the largest fancy vivid pink diamond ever to come up for sale.
The Gemological Institute of America awarded the Pink Legacy the highest diamond color grading of “vivid” vivid colored diamonds have the most strongly saturated hues. In addition, the Pink Legacy classifies as a Type IIa diamond, which contain little if any nitrogen and account for less than two percent of all gem diamonds. Specialists at Christie’s says the Pink Legacy is one of the most chemically pure gems they’ve encountered. The gem is said to have once belonged to the Oppenheimer diamond family. It was later revealed that Harry Winston CEO Nayla Hayek had purchased the diamond, and renamed it the Winston Pink Legacy. Read more here-http://bit.ly/2s43Uwe
-Jewelry Sales For Christie’s And Sotheby’s Total $906.3 Million In 2018. Combined jewelry sales for Christie’s and Sotheby’s totaled $906.3 million for 2018, with Christie’s achieving $492.3 million and Sotheby’s at $414 million. This total represents a 17.6% decline in jewelry sales compared with the $1.1 billion the two international auction houses achieved in 2017. Individually, Christie’s sales fell 11.5% while Sotheby’s dropped 25%. No reason was given by either auction house for the year-over-year decline in their 2018 statements. Both auction houses hold their most important jewelry sales in Geneva, New York, Hong Kong and London. Read more here-http://bit.ly/2F3Pzs3
-The Curse of the Hope Diamond Is Older Than You Think. It is believed that the Hope Diamond was initially embedded in the head of a statue of a Hindu goddess. Ever since, many of its rich owners have fallen foul of its alleged curse.Ever since the Hope Diamond, one of the largest and most famous colored diamonds in the world, appeared on the market in the 1830s, it has become notorious for allegedly spreading a deadly curse to those who dare to possess it. Read more here-http://bit.ly/2QjZZ86
The Rubik’s Cube solver can now fix 2×2 and Pyraminx puzzles. Set the scrambled colors and the program find the solution for you. Thry it here.
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-Gold Opens 2019 With Fanfare Amid Growth Concerns as Copper Sags. Gold rose, extending its best quarterly rally in more than a year as concern over China’s economic outlook weighed on global equities and industrial metals. Bullion hit a six-month high, nearing $1,300 an ounce, after a report showing a contraction in China manufacturing sent global stocks tumbling and boosted demand for the metal as a haven. Factory gauges in Italy and and Poland also sank. The dimming demand picture in China, the world’s largest base-metals user, pushed copper toward its biggest loss in two weeks while an index of 70 mining companies slid. Gold is rising on “more safe-haven buying interest amid a still very wobbly U.S. stock market,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note to clients. “There was also some weaker economic data coming out of the European Union, to also un-nerve traders and investors.”
Gold surged in the final quarter of 2018 as investors positioned themselves for a global slowdown, with fewer rate hikes expected from the U.S. Federal Reserve. Worldwide holdings in gold-backed exchange-traded funds have jumped. Major parts of the U.S. government will remain shuttered for a 12th day as President Donald Trump meets with congressional leaders from both parties at a White House briefing Wednesday on border security. Spot gold climbed as much as 0.5 percent to $1,288.83 an ounce, the highest since June 15, and traded at $1,285.77 at 10:33 a.m. in New York, according to Bloomberg generic pricing. In December, bullion capped the biggest quarterly increase since March 2017. After that rally, bullion’s 14-day relative strength index is well above 70, a level that can indicate a pullback to some investors.
The same growth concerns that are boosting demand for gold as a haven are eroding support for industrial metals. Copper for three-month delivery at the London Metal Exchange fell as much as 2.2 percent to $5,831 a metric ton, the cheapest since September. Lead, tin and zinc also declined, while aluminum and nickel were little changed. The Bloomberg Industrial Metals Subindex that tracks copper, aluminum, zinc and nickel slid as much as 1.3 percent to an almost two-year low. “Risk appetite continues to decline following weak Chinese PMI data and the U.S. government shutdown,” analysts at TD Securities including Bart Melek said in a note. “Safe haven assets are up.” Bloomberg