Gold futures rose
Gold is slightly higher in Asian trade on Tuesday after a sharp rise this year in the hope that global monetary policy is easier for most of the price.
On the Comex division of the New York Mercantile Exchange, gold for August delivery edged up 0.03% to $ 1,357.05 per troy ounce.
Silver futures for August delivery rose 0.27% to $ 20.358 per pound, while copper futures rose 0.05% to $ 2.147 per pound.
Overnight, gold closed nearly flat on Monday in choppy trading, as the landslide victory of Shinzo Abe in Japan and the possibility of the appointment of Theresa May as a replacement for David Cameron in the UK helps reduce uncertainty in global politics, offsetting the probability rises from the steps of further easing by the top center banks around the world.
In Japan, equities surged nearly 4%, while the yen fell sharply after Abe pledged to move forward with a raft of major constitutional reforms following a landslide election on the party in the house over the weekend. As part of the plan, the Japanese prime minister launched a stimulus measure ¥ 10 trillion ($ 98 billion) aimed at reviving the economy, including the proposal to fast-track construction on a series of high-speed rail across the nation.
While the Nikkei 225 rose 601.84, or 3.98% to 15,708.82, the Yen fell far against the US Dollar on the prospect that Abe’s Liberal Democratic Party (LDP) and their junior colleagues in the House could approve a fiscal stimulus. In the US afternoon trade, USD / JPY soaring 2.10 or 2.09% to 102.69, remaining on pace for the strongest one-day move since the end of April.
Elsewhere, investors kept a close eye on political developments in the United Kingdom after Andrea Leadsom pulled out of the campaign the Prime Minister monitored closely, leaving May as the sole candidate to succeed Cameron. Designation of May on Wednesday could boost England’s chances to gain access to the EU single market, the strengthening of the pound and soothe investor concerns throughout the euro area.
The S & P 500 Composite Index surged to an intraday high of 2,143.16 in broad risk on trade, jumping to an intra-session high on record. Investors brace to begin the period of the second quarter earnings on Monday when Alcoa (NYSE: NYSE: AA) released its quarterly results after the close of trading. The S & P and then make a record intra-day on 20 May 2015 when it reached a session high of 2,134.72.
Gold is seen as a hedge for investors in periods of high volatility in global equity markets.
Market participants also reacted to increased chances for a rate hike from the Federal Reserve after a 2,016 strong US jobs report on Friday. On Monday, CME Group (NASDAQ: NASDAQ: CME) tool Jewelry Fed increases the chances of a rate hike in December to 30.1%, up from 22.5% at the end of Friday’s session. Prior to the release, the possibility of a single rate increase by the Fed in 2016 reached 12%. In addition, Kansas City Fed President Esther George, eagle noted, told a management conference in Missouri that the rebound in the labor market last month could force him to continue the impetus to support a rate hike.
Investors are bullish on gold which support a gradual tightening of monetary policy by the Fed. Gold, which is not attached to the interest rate, struggling to compete with the high yield bearing assets in the environment increasing rate.
Technically
Resistance: 1358.25 1360.03 1361.22 High / Low: 1374.54 / 1350.48
Support: 1354.75 1352.78 1349.17 Running Price: 1355.05
Comment: For intraday trade today suggest Buy at 1358.80; stop loss at 1356.60; target at 1360.80.
The yen profit in the Asian market
The yen rose on Tuesday in Asia on safe-haven demand is increasing along with Britain which looks towards Brexit faster than expected.
USD / JPY was changing hands at 102.51, down 0.27%, while the AUD / USD was trading at 0.7535, up 0.01% ahead of closely-watched business surveys. GBP / USD tarded at 1.2982, down 0.07%.
Earlier in Japan, producer prices fell 4.2% as expected. NAB business confidence survey for June is due to the previous level in the plus -3, and a business survey for June are also on tap with a previous estimate of plus -10.
The US dollar index, which measures the strength of the dollar-weighted of six other major currencies, last quoted at 96.58.
Overnight, the dollar holds gains against other major currencies in quiet trading on Monday, as strong US employment data Friday continued to increase optimism over the strength of the economy.
The Labor Department reported on Friday that the US economy added 287,000 jobs last month, well above the 175,000 jobs expected by economists. hourly earnings rose an average of 2.6% compared with the previous year.
The report also showed that the unemployment rate ticked up to 4.9% and payrolls figures revised May dropped to 11,000 from a previously reported 38,000, the smallest monthly increase since 2010.
Strong jobs report is seen as unlikely to change the care plan the Federal Reserve to raise interest rates.
The pound briefly rose above the 1.30 level against the dollar on Monday, boosted by the prospect that Theresa May will be U.K. The next prime minster much earlier than had been anticipated.
The news came after Andrea Leadsom, one of two candidates of the British ruling Conservative Party managed to Prime Minister David Cameron pulled out of the race.
But sterling remained under pressure amid growing expectations for a rate cut from the Bank of England at the end of its policy meeting on Thursday.
Technically
Resistance: 102.87 103.31 103.52 High / Low: 103.25 / 99.95
Support: Running 102.48 102.05 101.64 Price: 102.72
Comment: For intraday trade today suggest Buy at 103.03; stop loss at 102.82; target at 103.43.
The Nikkei rose aided by the Japanese government’s stimulus plan
The Nikkei index in early trading on Tuesday morning observed a positive, when it was observed rose 486.23 points or 3.10 percent at 16195.05. Strengthening the Nikkei index was helped ole weaker yen and the Japanese government’s stimulus plan.
This morning, USD / JPY rose 2 percent to 103.20, after hitting a low of 100.45 on Monday. Currency pairs are in 102.64, after trading at a level close to 100 last week. A weaker yen is generally seen as positive for Japanese stocks because it makes exports cheaper.
The increase in the index was also boosted by the government’s stimulus plan of Prime Minister Shinzo Abe.
In the upper house election on Sunday, the coalition of Prime Minister Shinzo Abe won a landslide victory, in the development analysts say is likely to make it much easier to push through his economic agenda, dubbed abenomics.
Japanese Prime Minister Shinzo Abe, on Tuesday will ask the cabinet to compile a new rule measures to spur the economy, government sources said Monday
Abe said that he would order the minister to begin drafting the stimulus package. One of his advisers, as released by Bloomberg, said that the stimulus range from 20 trillion yen ($ 199 billion) in the current fiscal year.
Abe also explained in comments last Sunday night that he would try to spur economic growth through spending. “The theme of the autumn Parliament will push ahead with economic policy, in other words to accelerate out of deflation,” Abe said.
To finance the extra budget, they said the cabinet would consider the additional issuance of new government bonds in the first four years.
The prime minister is empowered to revive abenomics – policies to revive the nation’s economy. This package is also expected to include labor market reforms aimed at increasing the growth potential of Japan.
A weaker yen makes shares of exporters surged this morning. Toyota shares surged 7.81 percent, Honda shares jumped 7.19 percent, Nissan shares rose 3.37 percent, Mitsubishi shares jumped 8.64 percent.
As for the Nikkei index futures tracked rose 460.00 points or 2.93% at 16.170, up compared to the previous closing at 15.710.
Technically
Resistance: 16137 16178 16 227 High / Low: 16223/15083
Support: 16095 16047 15 998 Running Price: 16 125
Comment: For intraday trade today suggest Buy at 16181; stop loss at 16 381; target at 16 061.
