Gold, oil steady after plunge
London, April 16, 2013
Gold regained ground after its biggest fall on record and oil steadied after falling below $100 a barrel for the first time in nine months on Tuesday but investors stayed nervous about the health of the global economy.
The broad rout in commodities was triggered by weak data from China and the US that have sparked fresh concerns about the strength of economic recovery.
A bombing at the finish line of the Boston Marathon on Monday has also added to volatility in financial markets.
Investors were waiting for Germany's ZEW index, due out at 0900 GMT and expected to dip to 42 from last month's 48.5, for news about Europe's largest economy.
"We are focusing on what happens to the ZEW, we expect it to decline and that is due to some doubts about the global economy after we have seen some disappointing data from the U.S. and China," said ABN Amro economist Aline Schuiling.
Gold was up 1.5 percent as European trading gathered pace although its rebound after Monday's 8 percent drop, its biggest ever one-day fall, looked in danger of stalling.
"Given the scale of the sell-off, I would say that the rebound is not that impressive," said Tim Riddell, head of ANZ Global Markets Research.
Brent crude also clawed back ground although it remained below $100 a barrel having dropped below it for the first time in nine months.
MSCI's global share index, which tracks around 9000 stocks in 45 countries, was down 0.3 percent shortly after European trading resumed with another steady sell off.
London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX all opened roughly 0.4 percent lower pushing the FTSEeurofirst 300 down by the same amount.
US stock futures, meanwhile, were up around 0.6 percent, pointing to a rebound on Wall Street.
US stocks dropped more than 2 percent and the Standard & Poor's 500 index had its worst day since Nov. 7 overnight, after two bombs ripped through the crowd at the finish line of the Boston Marathon on Monday killing at least three people and injuring more than 100.
Economists have argued that markets were ripe for some correction after recent rallies, but have been taken aback by the sudden plunge in commodities.
Commodity-linked currencies tumbled again as the safe-haven rush by traders to the yen after the bombings in Boston added extra impetus to selling already taking place due to the selloff in gold and other commodities.
The Australian dollar dived 3.9 percent against the yen on Monday, its biggest daily fall in nearly two years, to 99.40 yen and after a slight recovery on Tuesday it last traded around 101.18 yen.
Against the dollar, the Aussie was at $1.0375, up a touch after Monday's 1.8 percent fall. - Reuters