Market Is Getting Driven

Gold rallied more than 2.6 percent on Thursday, its largest one-day gain since late January, as technical buy signals and new signs of a sluggish U.S. economy more than offset deepening despair over the euro zone. After flirting with a bear market on Wednesday, down more than 20 percent from its September record, bullion rallied early after Philadelphia Federal Reserve data showed a contraction in factory activity in the U.S. mid-Atlantic region that rekindled some hope the Fed would plough more money into the system to stimulate the economy, traders said. Technical buying also fueled gains after gold had nearly hit a key December low, trading just shy of key technical long-term support at the 100-week moving average of $1,515 per oz. But with the euro and U.S. stocks in decline and ...

Gold rose more than 1 percent on Thursday, bouncing off a 4-1/2 month low, as weaker prices attracted new physical buyers, but gains were likely to be limited as the euro was undermined by fears of a deepening debt crisis in Greece. Spot gold rose 1 percent to $1,553.80 an ounce by 09.07 a.m. EDT, from $1,538.30 late in New York on Wednesday, when it plunged to $1,527 - its weakest since December 29. The precious metal rose to a high of $1,557.56 earlier, helped by the approaching expiry of gold options in the COMEX futures market. U.S. gold futures hit a high of $1,557.90 an ounce and were at $1,554.30, up 1.1 percent. The contract had plunged to a multi-month low of $1,526.70 on Wednesday. Gold, traditionally a safe-haven asset, has been moving in tandem with riskier assets such as ...

Mervyn King, the Bank of England`s Governor, represented the quarterly inflation report on behalf of the Monetary Policy Committee, explaining the Bank`s new projections for inflation and growth. The Bank of England sees inflation slowing below 2% in two years, while continued risk of disorderly euro-area outcome forces downside pressures on growth. The BoE Mervin King while presenting the inflation report said that inflation will remain above the target in the coming year as well, while growth is seen now weaker, compared with the previous projections in February. However, recovery will gradually return on track, but at the moment higher energy prices and credit conditions hampered the pace of recovery significantly. The royal economy will also continue to face strong headwinds ...

The European Commission supported volatility to extend in the market amid the current deteriorating sentiment in the market, where the Commission revised growth forecast lower for the euro-area region adding concerns the current austerity-linked solution is weighing sharply on growth, forcing more pressures on lawmakers to find another way around to hammer that debt crisis as well as boosting growth, but without adopting further austerity. The critical economic situation in Europe is worsening and getting more complicated, where lawmakers cannot find a way to fight the debt crisis without affecting growth aspects, where the sharp austerity adopted across Europe has brought a technical recession confirmed in most of the nations in the euro zone, fueling the debt crisis to expand further ...

(Reuters) - Fierce debate is growing in Europe over whether austerity or growth offers the best strategy to overcome the continent's sovereign debt crisis. As if it were that simple. As the euro zone hovers on the brink of its second recession in three years, the battle launched in academic journals, blogs and the financial press has spread to the hustings in France, Greece and soon in EU economic powerhouse Germany too. "Europe can't cut and grow," Sony Kapoor, head of the Re-Define think-tank, and Peter Bofinger, a member of the German Council of Economic Advisers, said in an article before European Union leaders adopted a budget discipline pact last month. "The EU needs a growth compact, not a fiscal one. Swift action on tax and jobs is the way out of the crisis." The growth camp ...

(Reuters) - Spanish and Italian debt eased back from a sharp sell-off on Wednesday and shares staged a modest recovery but investors are wary of signs that the euro zone's debt problems are getting worse or that global growth is flagging. Yields on Spain's benchmark 10-year bonds fell 11 basis points to around 5.88 percent after rising to nearly six percent on Tuesday on new concerns about the government's ability to cut its deficit. Italian bond yields fell 14 basis points to 5.56 percent, although yields at a 12-month Treasury bill auction jumped, reflecting doubts about the euro zone and nervousness ahead of a bigger sale on Thursday. "We are having a kind of mini perfect storm with the conjunction of euro zone crisis flaring up, Chinese inflation and the U.S. labor market data," ...

(Reuters) - Sometimes a little bit of inflation is not such a bad thing. In the United States, prices starting to creep upward shows the deep wounds from the credit crisis are slowly healing and the U.S. economy is well on the road to recovery. The evidence is scattered but it also shows up in some national reports. Consumer inflation, after stripping out volatile food and energy prices, has edged upward over the past year and now is running just above the Federal Reserve's 2 percent target. Workers' pay is nudging higher as the labor market gradually improves. Hourly earnings have grown at an average annual rate of 2 percent since last May and posted a 2.1 percent gain last month, up from a 1.8 percent pace a year earlier. Home prices in a few cities, including Miami and Phoenix, have ...

(Reuters) - Asian shares fell on Friday and growth-linked currencies such as the Australian dollar were shunned after data showing shrinking factory activity in China and the euro zone heightened concerns about a slowdown in the global economy. Materials stocks such as miner BHP Billiton (BHP.AX) were prominent among the losers, but crude oil steadied after tumbling overnight and copper bounced off a 2-week low. Data on Thursday showed China's manufacturing sector activity shrank in March for a fifth successive month, while German and French manufacturing suffered a sharp decline that even the most pessimistic economists failed to predict. "Fears of a Chinese hard landing are on the rise; overdone we think," said Vincent Chaigneau, strategist at Societe Generale. "Concerns over Europe ...

(Reuters) - Call it spring fever. For the third year in a row, optimism is spreading that growth in the United States could be poised to accelerate and drive the economy into sunnier pastures. Claims for first-time jobless benefits dipped to a four-year low last week as layoffs slow. Factory output is steadily expanding. Retail sales have picked up the past two months. And Europe no longer looms as an immediate threat since Greece restructured its debt and won more bailout money. Even a 9 percent surge in gasoline prices on tensions with Iran over its nuclear program has failed to take much shine off consumer confidence. The University of Michigan survey slipped by one point to 74.3 in early March, but views on current conditions edged upward. "For now it's a Goldilocks scenario -- ...