U.S., World Markets Struggle; Gold Nears $1,900

Bikram Pandey
22 Aug, 2011
New York City

U.S. stocks struggled for the fourth day in a row and investors sought safety in precious metals. The U.S. bond yields hovered near record lows and gold raced to $1,900 an ounce. Oil edged higher as Gaddafi struggled to hold on Tripoli. Markets in Europe gained more than 1% and in Asia closed mixed.

[R]4:00 PM New York – U.S. stocks struggled for the fourth day in a row and investors sought safety in precious metals. The U.S. bond yields hovered near record lows and gold raced to $1,900 an ounce. Oil edged higher as Gaddafi struggled to hold on Tripoli. European markets gained more than 1% and markets in Asia closed mixed.[/R]

U.S. indexes futures rallied ahead of the anticipated speech by Federal Reserve Chairman Ben Bernanke. Bain Capital agreed to acquire Australia-based personal software maker MYOB. Cisco announced its intent to acquire AXIOSS software assets. Australia based Bow Energy receives $520 million bid from Arrow Energy.

German tax revenues rose 9.9% to €39.71 billion, Swiss money supply growth improved but Estonia’s producer price index slowed in July. Dutch consumer spending fell in June. Bulgarian jobless rate increased in the second quarter.

European indexes inched higher as NATO led aggression in Libya captured Tripoli. German Chancellor Angela Merkel rejected the idea of euro bonds as a solution to the sovereign debt crisis. Spain unveiled additional austerity measures. Skype agreed to buy GroupMe and Electrolux agreed to acquire Chilean appliance company CTI.

The UK indexes surged after resource-linked stocks gained and the UK household finance index declined in August. Essar revenues soared 37% driven by higher refining revenues. Micro Focus slumped 4.3% after terminating bid talks.

Stocks in Japan continued to drift lower on record high yen. The Nikkei declined to the level last seen on March 15 and the broader Topix index fell to a 2-year low. Automakers, electronics exporters and banks were among the leading decliners.

The Australian benchmark declined after weak commodities prices. BlueScope shuttered two steel plants and eliminated 1,000 jobs and Amcor announced better than expected earnings. Coal seam gas maker Bow Energy soared 60% after it received a buyout offer from Arrow Energy.

Commodities, Bonds and Currencies

Yields on 10-year bond increased to 2.09% and on 30-year bonds declined to 3.41%.

The U.S. dollar increased to $1.4371 to a euro and fell against the Japanese yen to 76.75 yen.

Immediate futures prices of Texas crude oil increased $1.86 to $84.12 a barrel, for natural gas decreased 0.05 cents to $3.89 per mbtu and gasoline prices decreased 0.85 cents to 283.38 cents a gallon.

In metals trading, copper prices decreased 2.75 cents to $3.97 per pound, gold increased $40.60 to $1,892.80 per ounce and silver increased $1.31 to $43.78.