Gold futures traded slightly higher during Monday’s Asian session as traders sought out traditional safe-haven plays on fears the U.S. government is headed towards a potentially crippling shutdown.
Last week, the precious metal advanced 0.5%, the second consecutive weekly gain. Gold futures were likely to find support at USD1,306.20 a troy ounce, the low from September 24 and resistance at USD1,366.50, the high from September 20.
On Saturday, the Republican-controlled U.S. House of Representatives passed legislation that would delay the implementation of Obamacare, President Obama’s landmark health care package passed in 2010. The Republican measure also seeks to strip out of Obamacare a controversial tax on medical device manufacturers.
However, Senate Majority Leader Harry Reid, a Nevada Democrat, has promised his chamber will veto the House legislation. Reid has been vocal in saying the Senate will not pass any budget stop-gap measure that includes significant alterations to Obamacare.
The specter of a government shutdown sent U.S. stocks falling last week and S&P 500 futures are weak during Monday’s Asian session, indicating markets do not favor a scenario under which the government in the world’s largest economy is not at work. That is also a scenario that risks not raising the U.S. debt ceiling.
Congress must pass a short-term budget by midnight on Monday in order to avoid a government shutdown and in less than three weeks, the debt ceiling must be read. With the U.S. political environment looking contentious, traders are not favoring riskier assets.
Elsewhere, Comex silver for December delivery fell 0.27% to USD21.773 per ounce while copper for December delivery lost 0.06% to USD3.318 per ounce.
Last week, the precious metal advanced 0.5%, the second consecutive weekly gain. Gold futures were likely to find support at USD1,306.20 a troy ounce, the low from September 24 and resistance at USD1,366.50, the high from September 20.
On Saturday, the Republican-controlled U.S. House of Representatives passed legislation that would delay the implementation of Obamacare, President Obama’s landmark health care package passed in 2010. The Republican measure also seeks to strip out of Obamacare a controversial tax on medical device manufacturers.
However, Senate Majority Leader Harry Reid, a Nevada Democrat, has promised his chamber will veto the House legislation. Reid has been vocal in saying the Senate will not pass any budget stop-gap measure that includes significant alterations to Obamacare.
The specter of a government shutdown sent U.S. stocks falling last week and S&P 500 futures are weak during Monday’s Asian session, indicating markets do not favor a scenario under which the government in the world’s largest economy is not at work. That is also a scenario that risks not raising the U.S. debt ceiling.
Congress must pass a short-term budget by midnight on Monday in order to avoid a government shutdown and in less than three weeks, the debt ceiling must be read. With the U.S. political environment looking contentious, traders are not favoring riskier assets.
Elsewhere, Comex silver for December delivery fell 0.27% to USD21.773 per ounce while copper for December delivery lost 0.06% to USD3.318 per ounce.
Oil tumbles as Chinese data disappoints
Oil futures traded sharply lower during Monday’s Asian session after a critical economic data point out of China surprised to the downside.
On the New York Mercantile Exchange, light, sweet crude futures for November delivery slid 1.16% to USD101.68 per barrel in Asian trading Monday. The November contract settled lower by 0.16% at USD102.87 per barrel last Friday.
The September reading of the China HSBC Purchasing Managers’ Index came in at 50.2, well below the flash reading of 51.2 and estimates calling for 51.2. Readings above 50 indicate expansion.
"The September HSBC China Manufacturing PMI edged up slightly from August. New orders remained flat from the previous month, while external demand improved,"said HSBC China chief economist, Hongbin Qu, in a statement. "Manufacturers restocking process continued but remained relatively slow. Growth is bottoming out on Beijing’s mini-stimulus. We expect continuous policy efforts to sustain the recovery."
Output "expanded for the second successive month in September, though the rate of growth slowed to a fractional pace. Furthermore, growth of new work was unchanged from the previous month and only slight. Nonetheless, new business from overseas increased for the first time in six months (albeit marginally), with panellists citing stronger demand from client bases in Europe and the US," according to HSBC.
On the New York Mercantile Exchange, light, sweet crude futures for November delivery slid 1.16% to USD101.68 per barrel in Asian trading Monday. The November contract settled lower by 0.16% at USD102.87 per barrel last Friday.
The September reading of the China HSBC Purchasing Managers’ Index came in at 50.2, well below the flash reading of 51.2 and estimates calling for 51.2. Readings above 50 indicate expansion.
"The September HSBC China Manufacturing PMI edged up slightly from August. New orders remained flat from the previous month, while external demand improved,"said HSBC China chief economist, Hongbin Qu, in a statement. "Manufacturers restocking process continued but remained relatively slow. Growth is bottoming out on Beijing’s mini-stimulus. We expect continuous policy efforts to sustain the recovery."
Output "expanded for the second successive month in September, though the rate of growth slowed to a fractional pace. Furthermore, growth of new work was unchanged from the previous month and only slight. Nonetheless, new business from overseas increased for the first time in six months (albeit marginally), with panellists citing stronger demand from client bases in Europe and the US," according to HSBC.
| Time | Cur. | Event | Actual | Forecast | Previous |
| Monday, September 30 | |||||
| 7:15 | CNY | Chinese HSBC Manufacturing PMI | 50.2 | 51.2 | 51.2 |
| 14:00 | GBP | BoE Consumer Credit | 0.60B | 0.60B | |
| 14:00 | GBP | M4 Money Supply (MoM) | 0.70% | 0.60% | |
| 14:00 | GBP | Mortgage Approvals | 61K | 61K | |
| 14:00 | GBP | Mortgage Lending | 0.90B | 0.70B | |
| 14:00 | GBP | Net Lending to Individuals | 1.6B | 1.3B | |
| 14:30 | EUR | Core CPI (YoY) | 1.10% | 1.10% | |
| 14:30 | EUR | CPI (YoY) | 1.30% | 1.30% | |
| 17:00 | INR | Indian Foreign Debt (USD) | 390.00B | ||
| 19:15 | USD | Chicago PMI | 54 | 53 | |
| 20:00 | USD | Dallas Fed Mfg Business Index | 5 | 5 | |
| 21:00 | USD | 3-Month Bill Auction | 0.02% | ||
| 21:00 | USD | 6-Month Bill Auction | 0.05% | ||
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