FIN: Eurozone fears continue to plague markets

31 Oct 22:34

Markets were sliding at midday Monday as commodity prices fell and as investors shifted their focus outside the eurozone, though problems there continued to weigh on sentiment as well.

At midday in Toronto the benchmark S&P/TSX composite index was down by about 120 points, or 0.96 per cent, to 12,400, despite a report Monday morning showing the country�s economy growing 0.3 per cent in August from the previous month and by 2.4 per cent year-over-year, and others showing that industrial product prices and raw material prices both beat expectations.

CMC Markets analyst Colin Cieszynski pointed to two market movers on Monday: continuing struggles to reform Italy�s finances and the Bank of Japan�s intervention to �knock down� the yen.

As well, Cieszynski noted that the Organisation for Economic Cooperation and Development cut its growth forecast for this year and next for both Europe and the U.S., �and suggested that the eurozone in particular could struggle, echoing the sentiment of the Bank of Canada who suggested last week that Europe could undergo a short recession.�

The price of crude oil slipped 90 cents to $94.42 US a barrel in electronic trading in New York at midday, and gold was down $23.40 to 1,723.80 US an ounce.

The Canadian dollar was down 21 basis points to $1.0061 US.

In the U.S., the Dow Jones industrial average was down about 132 points, or 1.08 per cent, to 12,099, and the Nasdaq composite index was down 25 points, or 0.90 per cent, to 2,713.

Markets overseas also fell on Monday. In Tokyo, the Nikkei slipped 0.69 per cent and the Hang Seng in Hong Kong edged downward by 0.77 per cent. The losses were bigger in Europe where London�s FTSE dropped 1.64 per cent, the CAC in Paris fell 2.38 per cent and Frankfurt�s DAX declined by 2.64 per cent.

RTRS: COMMODITIES-Oil, gold, copper trim monthly gains as dollar surges

31 Oct 22:32

* Copper leads complex lower, sheds more than 3 pct

* U.S. crude oil falls 1 pct, set for monthly increase

* Spot gold drops 2 pct after dollar strengthens

* Dollar rises after Japan intervenes to stem yen's gains (Adds quotes, updates prices)

LONDON/KUALA LUMPUR, Oct 31 (Reuters) - Oil, copper and gold slid on Monday, trimming gains for the month after intervention by Japan to stem the yen's rise sent the dollar soaring and doubts grew about a deal to tackle the European debt crisis.

"The dollar had been supportive of the commodity markets in the past few weeks," said Mark Pervan, global head of commodity research at Australia and New Zealand Banking Group in Melbourne.

The dollar climbed 1.1 percent against a basket of major currencies and hit a three-month high against the yen after Japan intervened in the currency markets for the third time this year.

A stronger dollar makes commodities more expensive in other currencies.

Investors were also reluctant to push commodities higher amid caution that the Group of 20 leaders' summit in France this week may disappoint with a lack of detail on Europe's plan to expand its rescue fund.

"There is some realism coming back to the market, the problems in Europe are far from being solved. The market was impressed by the deal but details are not yet clear. If it's seen as play on time then it might again come to disappointment," said Commerzbank analyst Eugen Weinberg.

Euro zone inflation remained at 3 percent in October, slightly higher than expected and prompting economists to postpone their bets for a central bank rate cut until December.

COPPER BIGGEST LOSER

Copper led the complex down, shedding as much as 3.7 percent to a low of $7,873.25 a tonne.

Three-month copper on the London Metal Exchange , which recovered to $7,975.75 a tonne, is on track to end the month 13 percent higher, the biggest gain since December 2010.

It is being supported by strong fundamentals, including continued supply disruptions at the world's second-largest copper mine, Grasberg in Indonesia, and steady spot demand in China, the world's top consumer of the metal.

Spot gold fell 2 percent to a low of $1,704.59 an ounce before regaining some ground to $1,725. Prices are still on course for a monthly increase of more than 5 percent after a decline of almost 11 percent in September.

Gold pared losses after futures broker MF Global filed for Chapter 11 bankruptcy protection, which helped focus on the metal's safe haven qualities.

"MF Global was not a big surprise. Clearly it's not a bank, it's not on the scale of Lehman Brothers, but that is what helped the (gold) market to bounce off today's lows," said VTB Capital analyst Andrey Kryuchenkov.

Oil also got hit by the stronger dollar as Brent crude LCOc1 lost 0.6 percent, to $109.25 a barrel, but was set for its biggest monthly gain in six months.

U.S. crude CLc1 fell 1 percent to $92.42 a barrel, still on track for a 17 percent increase this month, the biggest since May 2009.

A reasonable price for crude was between $80 and $100 a barrel, said Mohammed bin Dhaen al-Hamli, the oil minister of OPEC producer the United Arab Emirates, at an oil conference in Singapore.

The Organization of the Petroleum Exporting Countries (OPEC) will meet in December to review its output policy amid a faster-than-expected recovery in exports from war-torn Libya.

In agricultural markets, the stronger dollar also drove grains lower, while a lack of demand has also been a factor.

Weak export demand for U.S. corn and wheat reflects increased competition from Black Sea suppliers, which have returned to the market after a severe drought last year curtailed their exports.

In softs, sugar, coffee and cocoa futures extended losses in technically driven selling. (With additional reporting by Maytaal Angel, Amanda Cooper, Ikuko Kurahone, Rebekah Kebede, Rujun Shen, Carrie Ho and Bruce Hextall; Editing by Anthony Barker)

BS: Copper Falls on Concern Europe Will Struggle to Contain Crisis

31 Oct 22:31

Oct. 31 (Bloomberg) -- Copper fell the most in more than a week on concern that European leaders will struggle to raise funds to contain the region�s debt crisis, dimming prospects for commodity demand.

U.S. and European equities declined, and the Standard & Poor�s GSCI index of 24 raw materials dropped, with every commodity except hogs falling as of 11 a.m. in New York. Last week�s 15 percent gain in copper was the biggest since at least 1988 after European authorities pledged to boost the region�s rescue fund to 1 trillion euros ($1.4 trillion). The G-20 leaders will discuss Europe�s sovereign-debt crisis when they meet Nov. 3-4 in Cannes, France.

�People don�t know if what we�ve got is enough to quell the situation,� Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. �The euphoria is not going to last. There are still roadblocks for copper with uncertainities in China and the U.S.�

Copper futures for December delivery dropped 2.7 percent to $3.605 a pound at 11:08 a.m. on the Comex in New York. A close at that price would mark the biggest loss for a most-active contract since Oct. 20. Before today, copper was up 18 percent in October, the first advance in three months.

�The metal was driven too far too fast,� Zeman said. �There will be heavy resistance at $3.93.�

On the London Metal Exchange, copper for delivery in three months fell 2.4 percent to $7,980 a metric ton ($3.62 a pound).

Aluminum, tin, zinc, lead and nickel also declined in London.

--With assistance from Agnieszka Troszkiewicz in London. Editors: Steve Stroth, Sharon Lindores

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

BS: Oil Pares Biggest Monthly Rally in Two Years as Dollar Climbs

31 Oct 22:14

Oct. 31 (Bloomberg) -- Crude oil dropped in New York as the dollar climbed and equities fell, trimming the biggest monthly gain in more than two years.

Futures fell as much as 2.1 percent after Japan stepped in to foreign-exchange markets to weaken the yen against the dollar, making commodities priced in the U.S. currency less attractive to investors. Stocks retreated from a three-month high on concern European leaders will struggle to raise funds to contain the region�s debt crisis.

�The dollar and the equities are the primary drivers and this situation will remain in place,� said Kyle Cooper, director of research for IAF Advisors in Houston. �People realized that all the euphoria last week has not in any way solved the problem in Europe.�

Crude oil for December delivery declined $1.14, or 1.2 percent, to $92.18 a barrel at 10:13 a.m. on the New York Mercantile Exchange. Futures are up 16 percent this month, the biggest gain since May 2009. Oil settled at $93.96 on Oct. 27, the highest level since Aug. 1.

Brent oil for December settlement dropped $1.10, or 1 percent, to $108.81 a barrel on the London-based ICE Futures Europe exchange.

�Given the strength of the dollar and weakness in the equity markets, crude oil will struggle,� said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. �The dollar has posted strong gains against most currencies after the Japanese government took steps to curb the yen�s strength.�

Dollar Strengthens

The dollar rose against all of its 16 major peers.

The yen dropped as much as 4.9 percent against the dollar after Japan stepped into foreign-exchange markets to weaken the currency as its gains to a postwar record threatened an export- led economic recovery.

Japan intervened for the third time this year and pledged to keep selling the yen. Finance Minister Jun Azumi said the move was carried out to combat �one-sided speculative moves that don�t reflect the economic fundamentals of our economy.�

The Dollar Index, which tracks the U.S. currency against six major peers including the euro and the yen, rose 1.3 percent to 76.018.

�Oil is down with other commodities as the dollar strengthens,� said Christopher Bellew, a senior broker at Jefferies Bache Ltd. who correctly predicted prices would recover from last month�s slump.

The Standard & Poor�s GSCI Index of 24 raw materials slid 1.3 percent to 644.01.

Equities Drop

U.S. stocks declined, trimming the biggest monthly advance since 1987 in the Standard & Poor�s 500 Index. The S&P 500 fell 1.1 percent to 1,270.37, and the Dow Jones Industrial Average dropped 1 percent to 12,104.68.

Crude and equities rose last week after European leaders agreed to expand the region�s bailout fund.

China can�t play the role of �savior,� the official Xinhua news agency said yesterday, as investors awaited the country�s response to Europe�s request for money to boost the fund.

Oil at $80 to $100 a barrel is �reasonable� and will continue to encourage the building of additional spare production capacity, United Arab Emirates Energy Minister Mohamed al-Hamli said today. It is too early to discuss what the Organization of Petroleum Countries is likely to do when it meets to decide oil-production policy in December, he said.

Supply and Demand

Iran�s governor to OPEC, Mohammad Ali Khatibi, said supply and demand in world oil markets is balanced and there is no need for an emergency meeting of the producer group, according to the state-run Iranian Students News Agency yesterday. OPEC plans to meet next on Dec. 14 in Vienna.

Hedge funds increased bullish bets on West Texas Intermediate oil, the grade traded in New York, to the highest level since May on expectations that the gap between the U.S. benchmark price and Brent will continue to narrow.

Money managers boosted net-long wagers in futures and options by 15 percent in the week ended Oct. 25, according to the Commodity Futures Trading Commission�s Commitments of Traders report on Oct. 28.

--With assistance from Grant Smith in London and Aki Ito in Tokyo. Editors: Margot Habiby, Charlotte Porter

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net Moming Zhou in New York at Mzhou29@bloomberg.net;

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

TW: Dollar leaps vs yen after Bank of Japan sells yen

31 Oct 22:14

The dollar is rising sharply against the Japanese yen after the Bank of Japan weakened the yen to help Japanese exporters.
The Bank of Japan says it sold yen and bought dollars during Tokyo trading Monday in order to pull the yen down from a post-World War II high against the dollar. The super-strong yen was hurting Japanese exporters by making their goods more expensive for overseas customers.

Traders have been buying yen because it is seen as a safe place to store cash. Its biggest rivals, the euro and the U.S. dollar, have been less stable in recent months because of the European debt crisis and the uncertain U.S. economy.

DY: Gold Futures Trim Losses As Euro Zone Concerns Linger

31 Oct 22:09

Forexpros � Gold futures trimmed losses on Monday, pulling back from a three-day low as some safe-haven buying re-emerged amid ongoing concerns over the debt crisis in the euro zone.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,726.45 a troy ounce during U.S. morning trade, falling 1.3%.

It earlier fell by as much as 2.1% to trade at USD1,706.25 a troy ounce, the lowest price since October 26.

Gold�s safe haven appeal helped prices come off their lows after European Central Bank Governing Council Member Jens Weidmann said earlier that Greece�s fundamental problems remain �unsolved� following last week�s euro zone summit.

Meanwhile, Italian government bond yields continued to creep higher, with the two-year yield rising to 5.04%, the highest since July 2008. Yields on the ten-year bonds rose to 6.1%, the highest level since August 4, as investors worried that European leaders� plans to bolster the region�s lenders could fail.

Investors often buy gold as refuges against economic and political uncertainty.

Gold prices dropped to the lowest level in three days during the Asian trading session as the U.S. dollar rallied against its major counterparts after Japanese officials launched an intervention to weaken the yen after the dollar fell to a record low of JPY75.56 in early trade Monday.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.19% to trade at 76.11.

Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.

Meanwhile, gold traders were awaiting a number of key events scheduled for later in the week, which could affect prices.

The Federal Reserve is scheduled to hold its policy-setting meeting on Wednesday, while the European Central Bank is to meet on Thursday to discuss monetary policy.

French lender Societe Generale said that in the near-term, �the market will focus on how central banks across the board are going to shift from neutral or tightening to accommodative or aggressively accommodative policy.�

The lender said in a report that, �Gold should slowly drift higher. If we get some significant policy decisions, like an announcement of QE3, it will give a jolt to the upside.�

Elsewhere on the Comex, silver for December delivery dropped 2.72% to trade at USD34.32 a troy ounce, while copper for December delivery tumbled 2.78% to trade at USD3.603 a pound.

MW: Oil futures fall as much as 2% on dollar advance

31 Oct 22:07

Contracts on petroleum products, natural gas also lower

By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) � Crude-oil futures fell by as much as 2% Monday, tracking a broad decline among commodities as the dollar climbed following Japanese intervention in the currency markets to stem the rise of the yen.

Crude for December delivery CL1Z -1.78% lost $1.32, or 1.54%, to reach $92 a barrel on the New York Mercantile Exchange.

The losses came as the dollar index USDJPY +3.15% , which measures the greenback against a basket of six other currencies, climbed to 76.022, up from 75.063 late Friday. A stronger dollar tends to weigh on demand for oil and other commodities.

The dollar�s gains came after Finance Minister Jun Azumi said that the Bank of Japan intervened in the currency markets for the first time since August, according to reports from the region. Read more on reported intervention.

Oil futures had declined 64 cents to $93.32 in regular trading on Friday, although the benchmark contract ended the week up 6.7%. Read more on Friday's oil move.

�Most commodity markets eased on Friday, as an expected round of profit-taking set in after several weeks of robust gains. Markets also backed off somewhat after investors took a closer look at the recently completed European debt accords and realized that there are some loose ends that still have not yet been fully settled,� said Edward Meir, analyst at MF Global.

Late last week, European leaders announced the latest steps in a series of measures designed to stem the region�s debt crisis.

�Despite the misgivings that are surfacing, we suspect markets will likely hold their gains, as the accords are impressive in that they have brought together a disparate group of politicians to coalesce around a program, questionable as some of its parts seem to be,� said Meir, in a note.

Heating oil and gasoline prices traded lower along with gold Monday, ahead of the expiration of the November contracts at the close of trading on Nymex.

November heating oil HO1X -1.07% was down 3 cents at $3.03 a gallon and November gasoline RB1X -2.58% lost 5 cents to $2.63 a gallon.

December natural gas NG11Z -0.89% traded at $3.89 per million British thermal units, down 4 cents.

MW: Gold futures drop over $25 as U.S. dollar surges

31 Oct 22:06

Japan intervenes in currency markets to weaken the yen

By Myra P. Saefong and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) � Gold and silver futures dropped sharply Monday as Japan intervened in the currency markets, weakening the yen and fueling a rally in the U.S. dollar which, in turn, weighed on demand for dollar-denominated commodities.

Gold for December delivery GC1Z -1.48% slumped $26.30, or 1.5%, to $1,720.90 an ounce on the Comex division of the New York Mercantile Exchange. It touched a low of $1,705.50 earlier.

�The inevitable yen intervention boosted the dollar this morning,� said Richard Hastings, a macro economist at Global Hunter Securities.

�But it is the threat of much greater coordinated [Group of 20] currency actions which could boost the dollar more persistently [that is] pressuring metals prices today,� he said.

�Japan alone cannot successfully intervene and absolutely change the dollar-yen balance. So the threat of coordinated global action is building up and this is a new threat, and the [New York] markets absolutely do not like the tone of this,� he said.

The dollar index DXY +1.49% , which tracks the performance of the greenback against a basket of other major currencies, rallied to 75.930, up from 75.063 late Friday. Read more about currencies.

The Bank of Japan sold an undisclosed amount of yen on the foreign-exchange market Monday in a bid to weaken the Japanese currency.

Dollar-denominated gold prices tend to fall when the dollar rises because that makes the metal more expensive for holders of other currencies.

�After a short period of consolidation in gold, I believe it will continue upward progression,� said Jeff Wright, managing director at Global Hunter Securities. �We are comfortable with gold rising back to $1,800�$1,900 level in early 2012 with a spike above $2,000 in the first half of 2012.�

For now, metals saw broad declines. Silver futures for December delivery SI1Z -3.01% fell 93 cents, or 2.6%, to $34.36 an ounce on Comex and December copper HG1Z -2.67% traded at $3.60 a pound, down 10 cents, or 2.8%.

January platinum PL2F -2.44% sank $37.50, or 2.3%, to $1,614.30 an ounce, while December palladium PA1Z -2.07% shed $12.15, or 1.8%, to $656.20 an ounce.

MW: Gold, crude-oil futures fall as dollar strengthens

31 Oct 22:04

By Myra P. Saefong
SAN FRANCISCO (MarketWatch) -- Gold futures fell by more than $25 an ounce and crude-oil prices traded 2% lower Monday, as strength in the U.S. dollar fueled broad losses among commodities. Gold for December delivery GC1Z -1.49% was down $28.10, or 1.6%, at $1,719.10 an ounce on the Comex division of the New York Mercantile Exchange and December crude oil CL1Z -1.57% traded at $91.53 a barrel on Nymex, down $1.78, or 1.9%. The U.S. dollar index DXY +1.50% climbed to 75.997 from 75.063 late Friday after the Bank of Japan intervened in the currency markets on behalf of the Ministry of Finance in a bid to weaken the yen.

IBT: Gold Price Sinks as Risk Appetites Fall

31 Oct 22:03

GOLD PRICE NEWS � The gold price declined Monday morning as global financial markets shifted from �risk on� to �risk off.� The price of gold fell $21.80 to $1,722 per ounce, sinking alongside both stocks and commodities. S&P 500 stock futures fell 15.70 to 1265.20 while oil and copper fell 1.5% and 3.2%, respectively. Gold�s sister precious metal fell 2.8% to $34.30 per ounce as measured by front month silver futures on the COMEX.

Last week, the gold price advanced $108.84 to $1,744.94 per ounce, its highest closing level since September 21. In doing so the price of gold delivered a weekly gain of 6.7%, the best weekly rise since a 10.9% climb from November 30 � December 4, 2009. The gold price also extended its monthly and year-to-date gains to 7.4% and 22.8%, respectively.

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Silver posted a substantial gain alongside the gold price last week, jumping $3.86, or 12.3% to $35.13 per ounce. Shares of precious metal companies rallied as well, with the Philadelphia Gold & Silver Index (XAU) soaring 12.5% to 207.98. Last week the world�s three largest gold mining companies by market capitalization� Barrick Gold (ABX), Goldcorp (GG) and Newmont Mining (NEM) � reported third quarter earnings from a period of new record gold prices. Investors reacted favorably to each company�s results, with shares of ABX, GG, and NEM rising 2.3%, 1.6%, and 3.7%, respectively, following their earnings releases.

Gold stocks also received a boost last week from considerable strength in the broader equity markets. The Dow Jones Industrial Average (DJIA) climbed 3.6% to reach its highest level since July 28th of this year. With its advance, the Dow is on pace for its largest-ever monthly point gain and best percentage gain since January 1987. Risk aversion declined substantially as well, with the CBOE Volatility Index (VIX) sliding to its lowest level since August 3, 2011.

CIBC World Markets analyst Barry Cooper downgraded shares of Newmont Mining (NEM) to �Sector Underperformer� this morning. Cooper noted that �Operationally the company is still struggling with several assets�We see declines in production in each of the next two years such that without a change in gold prices, we would expect retrenchment of the share price down to the upper $50s.� Cooper cited the world�s largest gold producer, Barrick Gold (ABX) as a preferred alternative to Newmont.

Equities have rebounded significantly following several months of sharp losses stemming from concerns over the euro zone sovereign debt crisis and a new recession in the U.S. Last week the gold price and broader markets surged higher after euro zone officials announced a more robust set of plans that involve recapitalizing European banks and leveraging the European Financial Stability Fund (EFSF) to provide additional financial aid to Greece and other debt-strapped nations. While details of the plans remain non-existent,, European policymakers have committed themselves to further money printing and currency debasement as their chief forms of ammunition.

Looking ahead to the coming week, there are numerous potential catalysts likely to impact the gold price. Along with the ongoing sovereign debt drama in Europe, the U.S. economic calendar is filled with several important reports. The Chicago Purchasing Managers� Index, a key manufacturing gauge, is due out Monday morning, followed by the ISM Index, construction spending, and auto sales on Tuesday. The next Fed meeting will occur on Wednesday, with the Federal Open Market Committee (FOMC) announcement due at 2:15pm ET.

The remainder of the week is filled with several key data points on the U.S. jobs environment � including the ADP employment report on Wednesday, jobless claims on Thursday, and non-farm payrolls on Friday. If the reports come in ahead of expectations, the price of gold could come under pressure. Alternatively, if the reports disappoint, calls for a third round of quantitative easing (QE3) may increase and lead to higher gold prices.

MW: Treasurys gain on yen intervention

31 Oct 22:02

For October, U.S. debt facing worst month since December

By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) � Treasury prices jumped Monday, pushing yields down, driven by demand for a safe haven due to a combination of resurfacing worries about European debt and Japan�s announcement that it would intervene in currency markets to weaken the Japanese yen, which also boosted the U.S. dollar.

Yields on 10-year notes 10_YEAR -5.62% , which move inversely to prices, fell 10 basis points to 2.22%. A basis point is 1/100 percentage point.

Yields on 2-year notes 2_YEAR -11.63% declined 2 basis points to 0.27%.

Thirty-year-bond yields 30_YEAR -4.51% dropped 13 basis points to 3.25%.

Japan sold an undisclosed amount of yen on the foreign-exchange market Monday, after the country�s currency hit a post-World-War-II record high against the U.S. dollar. To weaken its currency, Japan ends up buying more dollars, which tend to get invested in U.S. Treasury debt. Read about dollar, yen intervention.

�Treasurys were bid overnight on intervention-flow anticipation as [Japan�s] Ministry of Finance announced it will be selling yen versus the dollar to slow the rise of the Japanese currency,� said bond strategists at CRT Capital Group.

The gains for bonds extended a rally Friday, pushing yields down from the highest level since August. Markets are reassessing the longer-term prognosis for Europe after the prior sessions� relief driven by a broader European Union plan to deal with the region�s sovereign-debt crisis. See more on Treasury rally Friday.

Also helping bonds: It�s the last day of the month, when many fund managers who adjust holdings to match their benchmark indexes buy more U.S. bonds.

�Weekend press on the EU summit did not read well, such that flows since the summit are likely also to reflect profit-taking after a strong positive reaction to the summit,� said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.

�Month-end flows will also likely benefit bonds over equities,� as a big gain in stocks and rise in yields forces investors to readjust their allocations,� he said. However, that may lead to a bear market for bonds �which is our view, or it could be that a new wave of the EU contagion is beginning,� Gilhooly wrote in a note.

U.S. stocks lost ground, with the Standard & Poor's 500 Index SPX -1.66% losing 1.2%.

As for the only U.S. data for the session, a reading on Chicago-area manufacturing showed business grew slower this month. Among the key events this week are a report Tuesday on national manufacturing activity and the Federal reserve�s two-day policy meeting ending Wednesday. Read about Fed meeting expectations.

After that will come Friday�s nonfarm employment report for October. Read about payrolls.

Monthly, yearly performance

Treasurys of all maturities have fallen 1.44% in the month through Friday, according to an index compiled by Bank of America Merrill Lynch.

It�s the first month in the red since March and the worst monthly performance since December.

Treasury bonds have still returned 7.23% this year.

As for other fixed-income sectors, corporate bonds have gained 1.13% this month and are up 6.82% so far in 2011. See story on corporate bonds� gains.

High-yield bonds, also known as junk bonds, jumped 6.08% this month, turning a loss for the year to a 4.28% return, according to Bank of America Merrill Lynch.

Mortgage bonds slipped 0.13% this month but are up 5.11% in 2011.

Municipal bonds lost 0.67% this month but remain up 8.17% so far this year.

MW: Dollar jumps after Japan intervenes to sell yen

31 Oct 22:01

U.S. buck on pace for worst month since April

By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) � Japan sold an undisclosed amount of yen on the foreign-exchange market Monday, sending the U.S. dollar and the euro climbing sharply against the currency.

The dollar USDJPY +3.10% surged against the yen, trading as high as �79.53, according to FactSet Research data, compared to �75.77 in early Monday morning trading and in North American activity late Friday. The dollar came a bit off those highs lately to buy �77.98.

That took the dollar back to its level against the yen last seen in August, the last time Japan intervened in currency markets.

The euro EURJPY +1.44% also jumped against the yen, buying �109.18 versus �107.24 Friday.

The dollar index DXY +1.44% , which measures the greenback against a basket of six major currencies, rose to 75.952 from 75.063 Friday.

The euro EURUSD -1.61% fell to $1.4003, down from $1.4155 late Friday.

Earlier Monday, the dollar hit a fresh post-World-War-II record low against the yen and Japanese Finance Minister Jun Azumi warned again that Tokyo would take decisive steps to stem the currency�s rise if required.

Azumi later confirmed that the Bank of Japan intervened in the currency markets on behalf of the Ministry of Finance for the first time since August but didn�t comment on the size of the action, reports from the region said.

�It�s been massive, really � that�s the only word to describe it,� said Michael Turner, strategist at RBC Capital Markets. �From what we gather, it�s larger than their most recent intervention.�

On the timing of the move, he said: �I guess the language and the threat were always there ... but there wasn�t a huge shift in the language over the last week to suggest it was evident.�

Market estimates have pegged the size of the intervention at more than $130 billion (�10.3 trillion), said Simon Derrick, currency strategist at Bank of New York Mellon, compared to around $57.1 billion in the previous bout of Japanese intervention on Aug. 4. When Japan sells yen against the dollar, those dollars tend to get invested back in Treasury bonds, prices for which got boost Monday. Read about Treasury bonds, yen intervention.

The move translated into strong across-the-board gains for the dollar, which was also a beneficiary of previous intervention by Japan as well as past efforts by the Swiss National Bank to curtail the rise of the Swiss franc, though mostly targeted at the exchange rate with the euro.

Intervention by Japan and Switzerland have both resulted in dollar strength �as safe-haven flows are diverted away from the �intervening� currency to the next best, most liquid option, which is the U.S. dollar,� wrote Stephen Gallo, head of market analysis at Schneider Foreign Exchange.

PR: Gold slumps as US dollar rallies after Bank of Japan sells yen

31 Oct 22:00

The price of gold fell sharply this afternoon after the Bank of Japan decided to intervene in the foreign exchange markets to weaken the national currency to stimulate export growth.

The decision to sell the yen, which was the second such move by Japan�s central bank since early August, came after the yen hit fresh record highs against the US dollar on Monday.

Japan, whose economy is heavily reliant on exports, saw shipments rise 2.4 percent in September, more than double the projected growth of around one percent.

Late last week, Japanese officials expressed concerns with the sharp rise of the yen, which hit all time highs against the greenback for three consecutive sessions to end the week and warned that an intervention was possible.

Japan�s finance minister Jun Azumi said gains in the national currency were driven by speculation.
The move by the Bank of Japan boosted the US dollar, which is seen as an alternative asset to the American currency.

Gold was also pressured by profit taking after the price of the yellow metal gained US$100 last week.

Gold traded at US$1,723/oz this afternoon, down US$20 from Friday�s close. Silver dropped 82 cents to US$34.47/oz and platinum pulled back US$38 to US$1,609/oz.

RTRS: CANADA STOCKS-Gold, oil slide pull TSX 2 pct lower at open

31 Oct 19:55

TORONTO, Oct 31 (Reuters) - The Toronto Stock Exchange's main index .GSPTSE fell more than 2 percent at the open on Friday, snapping three straight days of gains, as commodity prices fell.

The S&P/TSX composite index .GSPTSE dropped 204.53 points, or 2.08 percent, to 9,651.68. (Reporting by Ka Yan Ng; Editing by Peter Galloway)

AFP: Stocks as Good as Gold

31 Oct 19:55

At the very mention of gold, images of value, stability, and growth pop into my head.

It's not hard to understand why. For decades, the precious metal has been marketed as an attractive investment and a great way to hedge inflation, recession, and almost every other economic bogeyman.

In spite of gold's allure in volatile times such as this, the true long-term performance of gold lags stocks by a significant margin. But investors don't need to give up the shiny lure of stability to earn better returns in stocks -- there are stocks that are as good as gold. In fact, many are even better.

Chasing shiny trinkets
As a new investor, I was drawn to the allure of growth. This led me to buy -- or seriously consider buying -- shares in tech darlings such as Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ) at the height of speculation in 2000. But while these stocks were shinier than gold in the few years leading up to the millennium, the luster soon wore off. Stock in each company shed more than 50% of its value in the year following and only Hewlett-Packard has made significant progress in recovering since.

These computing stalwarts aren't necessarily poor businesses -- the fundamental conditions just didn't support the share price at the time. I would have been far better off had I understood what demented guru Jeremy Siegel pointed out in his book, The Future for Investors: Regular investments in stable, dividend-paying stocks are ultimately the best place for long-term cash.

You can have it all
Dividend payments to shareholders are a significant stabilizing factor in a stock's return, because they help smooth out the ups and downs of the market over time, and they indicate that the company is generating cash. Just like gold, steady dividends protect investors from bear markets. But even better than gold, dividends also help boost returns.

For instance, look at the long-haul performance of these dividend-paying stocks:

Company
20-Year Return
McDonald's (NYSE: MCD)
1,147%
ConocoPhillips (NYSE: COP)
874%
Boeing (NYSE: BA)
401%
General Electric (NYSE: GE)
784%
Coca-Cola (NYSE: KO)
1,078%
S&P 500
243%
Gold
86%
Now, lest I be accused of cherry-picking these examples, consider this: The Vanguard Windsor II (VWNFX) fund, our proxy for stocks with above-average yields, returned a market-beating 467% over the trailing 20 years.

Each company above had a long operating history in a relatively stable sector, providing investors a defensive edge with low long-term risk. Even with the dramatic increase in the price of gold in the last few years, the table above shows that dividend-paying stocks leave gold in the dust over extended time frames.

To their advantage, many of these companies have maintained (and sometimes even raised) dividend payments to shareholders -- sometimes even during down economic cycles. This consistency of a cash yield helps boost shareholder returns in the company, because more shares are purchased when the stock is depressed. One crucial point, though: To realize the full benefits these stocks provide, investors must reinvest the dividends.

Regain your luster
Dividend-paying stocks give investors the ability to not only survive years of market turmoil, but, through reinvesting, to make more money along the way. That's about the best hedge against economic bogeymen there is.

If you're short on time or ideas, the Motley Fool Income Investor service is a great place to find dividend payers -- the average recommendation is beating the S&P by 4 percentage points and offers more than a 4% yield. You can click here for a free, 30-day trial to see the team's top dividend stocks for right now.

This article was originally published on July 18, 2007. It has been updated.

Fool contributor Dave Mock still has a soft spot for gold, but satisfies it with dividend stocks. The longtime Fool owns no shares of companies mentioned here. Coca-Cola and Dell are Motley Fool Inside Value selections. Vanguard Windsor is a Champion Funds choice. The Motley Fool's disclosure policy is pure 24 karat, through and through.

BLBG: U.S. October Michigan Consumer Sentiment Index Falls (Update1)

31 Oct 19:52

By Timothy R. Homan

Oct. 31 (Bloomberg) -- Confidence among U.S. consumers fell in October by the most on record, signaling spending will continue to weaken.

The Reuters/University of Michigan final index of consumer sentiment dropped to 57.6 from 70.3 in September, the biggest decline since monthly data began in 1978. The measure averaged 85.6 in 2007.

The dimming outlook is likely to drag down spending, which contracted last quarter by the most in three decades and accounts for more than two-thirds of the U.S. economy. Americans are cutting back on purchases of necessities and big-ticket items as home values fall, stock prices slump and job losses climb.

``The collapse in confidence is directly tied to perceptions about economic conditions, and that is likely to mean that households will keep their wallets closed,'' Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. ``Given this is the holiday shopping season, that is not good news for retailers.''

The confidence index was forecast to fall to 57.5, according to the median of 60 economists surveyed by Bloomberg News. Estimates ranged from 50 to 63.

A government report earlier today showed spending by U.S. consumers fell 0.3 percent in September, capping the worst quarter in three decades.

Business Slump

Separately, a survey of Chicago purchasing managers showed business contracted in October at the fastest pace since the 2001 recession. The Institute for Supply Management-Chicago said its index slumped to 37.8 this month, the lowest reading since May 2001, from 56.7 in September. Fifty is the dividing line between growth and contraction.

The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 57 from 67.2.

A gauge of current conditions, which reflects Americans' perceptions of their financial situations and whether it is a good time to buy big-ticket items like cars, slumped to 58.4, the lowest level ever, from 75.

There was good news on price expectations. Consumers said they projected an inflation rate of 3.9 percent over the next 12 months, compared with 4.3 percent in the September survey. Over the next five years, the figures tracked by Federal Reserve policy makers, Americans expected a 2.9 percent rate of inflation, down from the prior month and the slowest pace since March.

Survey Details

The final Reuters/University of Michigan consumer confidence report reflects about 500 responses, compared with 300 households for the preliminary survey.

Cutbacks in consumer spending are likely to drag down company earnings during the holiday season. Amazon.com Inc., the world's largest Internet retailer, said last week that its 2008 sales may be $1 billion less than analysts estimated.

Chief Financial Officer Tom Szkutak said in an Oct. 22 conference call that growth slowed toward the end of the third quarter, ``coinciding'' with disruptions in the financial markets. Holiday shopping in the fourth quarter last year accounted for 43 percent of Amazon.com's annual profit.

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

BLBG: Gold Heads for Biggest Monthly Drop in 25 Years as Dollar Gains

31 Oct 19:52

By Pham-Duy Nguyen

Oct. 31 (Bloomberg) -- Gold futures fell, heading for the biggest monthly drop in 25 years, as the dollar climbed, reducing the appeal of the precious metal as an alternative investment. Silver also declined.

The dollar rebounded against a weighted basket of six major currencies after dropping 2.8 percent in the previous two days. Equities worldwide were poised for the biggest monthly decline on record. Before today, gold dropped 12 percent this year, while the dollar index gained 10 percent.

``Global liquidation means more money from foreign assets are going into the dollar,'' said Adrian Day, the president of Adrian Day's Asset Management in Annapolis, Maryland. ``The dollar is seen as a safe haven. There's also liquidation of gold itself, which is easily sold.''

Gold futures for December delivery fell $4.70, or 0.6 percent, to $733.80 an ounce at 8:34 a.m. on the Comex division of the New York Mercantile Exchange. This month, the price has dropped 17 percent, the most since February 1983.

Silver futures for December delivery dropped 18.5 cents, or 1.9 percent, to $9.60 an ounce. The metal is down 22 percent this month.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

GS: Gold Investments Market Update - Gold is Up 12% while S&P is Down 37% Since Credit Crisis Began

31 Oct 19:51

Gold continues to surprise to the downside on the COMEX and the futures markets in spite of huge physical demand, increasing supply issues and surging premiums on bullion products.

Speculative paper players using huge leverage continue to exit positions for the relative safety of cash due to margin calls on other bets and some investment banks continue to short gold despite the incredibly strong fundamentals for bullion itself. Once the AM and PM gold fixes for physical bullion took place yesterday (at $772.25 and $755.25 respectively) gold was again aggressively sold short by some US investment banks. The selling is very determined and suggests that there is a strong desire not to have gold surging back above $800/oz.

Gold remains extremely oversold as evidenced in the commitment of traders report (COT) which shows that open interest has recently dropped to just over 300,000 open contracts from a record of 490,000 contracts last October. This is due to the relentless unwinding of long positions by speculators in the massive deleveraging seen in recent months.

However, the unwinding of leveraged positions and short term manipulations by the leveraged paper players will prove to be just that - short term manipulations. The laws of supply and demand will triumph over the irrational casino type behavior seen in the gold market in recent weeks.

The laws of supply and demand will result in sharply higher bullion prices in the coming weeks. Already the premiums on one ounce gold coins and bars are as high as 15% - if the coins or bars can be sourced at all. Silver coins and bars are attracting even higher premiums of as high as 50% to 100% as there is little or no supply of 1 oz, 10 oz and 100 oz silver products. Only 1000 oz silver bars are available and even they are seeing their premiums rise.
Investors are increasingly wary of high risk, new fangled and complex financial derivative products designed to make large returns. Return of capital is now more important than return on capital.

Wealth accumulation is rightly being shunned in favour of wealth preservation and bullion and those investors who have wisely diversified into bullion will be the beneficiaries of this in the coming weeks.

Investors want hard tangible assets in their portfolio that have little or no counterparty risk and cannot collapse in value in a matter of days as many share prices have done in recent weeks. Systemic risk also has savers concerned about the security of their deposits despite recent government guarantees. The counterparty risk posed by spread betting companies and CFD providers is now being reassessed.

Gold is Up 12% while S&P is Down 37% Since Credit Crisis Began

As expected, the finite currency that is gold has held up better than any of the commodities. Gold had fallen about 32% since hitting a record nominal high in March, compared with a 57% decline in oil, 54% drop in copper, and 65% decline in platinum. Stock markets have not fared much better than commodity markets in the last year with declines of between 35% and 50% seen on the major international indices.

The Performance Table above and the table below (Physical Gold Versus the S&P 500) conclusively show how gold has acted as a safe haven in recent months and gold will continue to act as a safe haven in the medium to long term as it always has.

Physical Gold Versus the S&P 500

The table above is a clear example of gold's historic role as a safe haven asset in times of economic uncertainty. It shows the industry performance of Physical Gold Versus the S&P 500 during eleven stock market declines of 15% or more in the Post-War period (since 1946).

Since August 2007 gold has risen from $650 to $730 today or more than 12% and the S&P 500 has fallen by 37% (1500 to 954). Other stock market indices have fallen by much more.

This is clear evidence if any were needed of gold's role as a safe haven in a properly diversified investment portfolio.

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RTRS: FOREX-Dollar trims losses vs yen after UMich report

31 Oct 19:50

(Updates with market reaction to U.S. data)

NEW YORK, Oct 31 (Reuters) - The dollar trimmed losses against the yen on Friday after a U.S. consumer confidence report for October came in broadly in-line with market expectations.

The dollar edged up to 98.40 yen from 97.98 before the survey.

The Reuters/University of Michigan Surveys of Consumers said its final reading of its index of confidence plunged to 57.6 in October from 70.3 in September, which was slightly below economists' expectations for a reading of 57.5. For report, see [ID:nN31351574]. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Theodore d'Afflisio)

DY: Copper Futures Tumble As Japan Intervention Boosts Dollar

31 Oct 19:50

Forexpros � Copper futures tumbled on Monday, as the U.S. dollar rallied against its major counterparts after Japan intervened in the foreign-exchange market to weaken the yen, while lingering concerns over the debt crisis in the euro zone also weighed.

On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.599 a pound during European morning trade, tumbling 2.89%.

It earlier fell by as much as 3.5% to trade at USD3.567 a pound, the lowest price since October 27.

Copper�s losses came as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rallied 1.2% to trade at 76.12.

The greenback�s gains came after Japanese officials launched an intervention to curb the appreciation of the yen after the dollar fell to a record low of JPY75.56 in early trade Monday.

Japanese Finance Minister Jun Azumi said Tokyo had acted on its own and would keep intervening until it was satisfied with the results.

A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.

Meanwhile, lingering concerns over the euro zone debt crisis also weighed. European Central Bank Governing Council Member Jens Weidmann said earlier that Greece�s fundamental problems remain �unsolved� following last week�s euro zone summit.

On Friday, ratings agency Fitch said that writedowns on Greek debt would indicate a default, while Italy�s borrowing costs rose to a euro lifetime high.

In industry news, workers at Chile�s Collahuasi mine ended a partial strike on Saturday after reaching an agreement with management over bonus payments.

Collahuasi, co-owned by mining giants Xstrata and Anglo American, is the world�s third largest copper mine, accounting for nearly 3% of global copper production.

However, a work stoppage continued at Freeport McMoran Copper & Gold�s Grasberg mine in Indonesia, the world�s second largest, as negotiations between union and management remain deadlocked.

Elsewhere on the Comex, gold for December delivery dropped 1.62% to trade at USD1,718.85 a troy ounce, while silver for December delivery tumbled 2.67% to trade at USD34.34 a troy ounce.