Published: Sun, March 19, 2017
Business | By Sandy Mccarthy

Gold regains 29K-mark, soars ₹ 450 on global cues

Gold regains 29K-mark, soars ₹ 450 on global cues

Stock movers:MSCI Inc.(MSCI) rose 2.7% after it denied reports that it received, and rejected, a buyout bid by S&P Global Inc.

The news, which came with an upbeat assessment of the world's top economy, fired U.S. stocks and sent the greenback tumbling in U.S. trade.

Precious metals prices climbed on Thursday to their highest level in over a week after the USA central bank signalled only gradual rate tightening and the dollar slid to its lowest in five weeks.

Analysts said the election this week in Holland had calmed concerns over political risk in Europe, as Dutch center-right Prime Minister Mark Rutte fought off the challenge of anti-Islam and anti-EU rival Geert Wilders.

Dealers said much of the dollar's fall overnight looked to have been investors taking some profit on the large bets taken on the currency since November and again in the last fortnight, in expectation that the Fed would raise rates more sharply than previously expected going forward.

At 3:13 p.m., the Dow Jones Industrial Average was down 34.93 points, or 0.17 percent, to 20,915.17, the S&P 500 had lost 5.85 points, or 0.25 percent, to 2,379.41, and the Nasdaq Composite had dropped 5.46 points, or 0.09 percent, to 5,894.59. The Russell 2000 index of smaller stocks also rose slightly, up 3.20 points, or 0.2 percent, to 1,386.03.

Market attention will be squarely focused on Fed Chair Janet Yellen's comments to gauge the future path of interest rates.

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The cement-maker advanced 1.1 per cent to €32.81, while the airline slipped 1.5 per cent to €14.13 as oil prices rose. The Aussie was down 0.3 percent at $0.7687 following its overnight surge of 2 percent to a three-week high of $0.7720.

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The Netherlands has its own election this week, where politicians have also railed against the European Union and immigrants. OIL: Benchmark U.S. crude oil fell 77 cents to $47.63 per barrel in electronic trading on the New York Mercantile Exchange.

US President Donald Trump's failure so far to push through promised economic stimulus measures may have influenced the Fed, said Tom Kendall at ICBC Standard Bank.

Yields ticked higher as bond prices fell. The People's Bank of China hiked the rate for its six-month and one-year medium-term lending facility and open-market repurchase operations by 0.1%.

OTHERS STAND PAT: Japan's central bank left its benchmark lending rate unchanged and said it would work toward a 2% inflation rate target. Gold is viewed by many investors as a hedge against rising inflation.

That helped Amsterdam's AEX stock index climb to its highest level in more than nine years, while both Germany's DAX and France's CAC 40 hit their highest levels since mid-2015 as fears eased that the euro zone was heading inexorably towards a break-up. Separately, retail sales rose 0.1% in February (http://www.marketwatch.com/story/us-retail-sales-barely-budge-in-february-2017-03-15). It was fractionally higher at $1.07715 in early trade, after two days of strong gains, and set to end the week up 0.9 percent.

U.S. Treasury yields, which slid after the decision, staged a recovery on Thursday and continued to rise on Friday.

Gold is highly sensitive to rising United States interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Against the yen, the dollar fell to a two-week low and last traded down 0.5 percent at 112.74 yen. The euro rose to $1.0733 from $1.0713, and the British pound rose to $1.2352 from $1.2301.

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