Category: Market

Generali Beats Expectations as Cost Cuts Pay Off

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Italian insurer Assicurazioni Generali (Milan Stock Exchange: G-IT) reported first quarter earnings that beat expectations on Friday, results which the group`s chief executive called “solid” as restructuring starts to pay off.

The third-largest insurer in Europe reported an increase in net profit to 603 million euros (USD 786.5 million), up 6.3 percent from a year ago. Analysts polled by the group had expected a net profit of 528 million euros. A Dow Jones poll put the forecast at 550 million euros.

“We`re proud. We think the numbers are solid and good, and are going in the right direction,” Chief executive Mario Greco told CNBC on Friday.

Greco said the group had recorded its best operating result in the last four years, thanks to an excellent PandC (property and casualty) performance.

The group expects an improvement in its total operating result in 2013, as it continues to strengthen its capital position and to cut expenditures.

“We are making good progress in implementing the planned measures to turn around our business,” he said.

Operating profit in the life insurance sector declined 2.6 percent year on year to 797 million in the first quarter. Greco defended the weakness in the life division compared to the rise in PandC.

“Life is troubled by the economic conditions and this is something we cannot do anything about. The margins are picking up a little bit and are staying above 20 percent which is the really important threshold in life.”

The life business had suffered as a result of economic crises in southern Europe, Greco said.

“The country which is doing best is Germany and this is no surprise to anyone in Europe. Economies in France, Italy and Spain are really suffering and we see that in our numbers,” he said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Investors continue to move from gold to equities

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Despite gold prices bouncing off their April lows, investors continue to pull money out of the precious metal and plow it into equities, as the stock market keeps climbing to new highs.

Since bottoming at USD 1,321.50 on April 16, gold prices have stabilized and rallied more than 11 percent, but the SPDR Gold Trust ETF (NYSE Arca: GLD) has had more than USD 4.4 billion in outflows, according to IndexUniverse.com.

The exodus from the biggest commodity ETF is nothing new. Last month, the GLD experienced USD 6.8 billion in outflows, putting the total figure so far this year at USD 14 billion.

As fund flows decrease, the GLD is no longer the sixth-largest holder of gold in the world. For the first time since the second quarter of 2008, the ETF`s bullion levels fell below China`s gold reserves.

Despite the outflows, the SPDR Gold Trust still holds more than 1,000 tonnes of the precious metal in its highly secured vaults, but at 1,052 tonnes, that`s down 22 percent since its holdings peaked at 1,351 tonnes in mid-December.

-BY CNBC`s Robert Hum and Giovanny Moreano

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why there’s a lot more ‘juice’ in the Yuan trade

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Even as China gets serious in fending off speculative inflows that could cause the yuan to jump and destabilize the economy, analysts tell CNBC the measures taken by Beijing will do little to derail a strengthening Chinese currency.

Strength in the yuan has taken markets by surprise in recent times, appreciating at a rapid pace of around 1.5 percent against the US dollar since mid-February. On Thursday it hit a record high of 6.1336 per dollar in morning Asian trade after the People`s Bank of China (PBOC) fixed the yuan mid-point at the highest level since the 2005 revaluation.

The central bank indicated on Wednesday that it was ready to take steps to control the wave of capital inflows that threaten to destabilize exports as the yuan appreciates rapidly days after the foreign exchange regulator came up with new rules to crack down on inflows disguised as trade payments.

On Thursday, Reuters reported that the central bank was on course to inject 84 billion yuan (USD 13.6 billion) into the market for this week.

But analysts told CNBC that the yuan upward momentum is intact and the authorities may not do anything drastic to stem that.

“There is still a lot of juice in this trade,” said Stuart Oakley, managing director of Asian currency trading at investment bank Nomura. “To be short dollars and long yuan is the real trade and it seems to have by-passed the market completely,” he added.

The recent steep appreciation in the yuan is a “monumental move by Chinese standards” according to Oakley.

While the yuan is still a managed currency the Chinese have hinted in recent months that they could allow market forces to play a greater role in its movement. At present the dollar/yuan exchange rate may rise or fall one percent from the mid-point set each day.

Nomura`s Oakley is confident that the rapid appreciation in the yen is a sign that China is close to taking steps to open up its currency in the near future. He forecasts full liberalization to take place over the next five years.

“It is clear to us this move [higher] is a precursor to them widening their trading band and moving along the path to currency liberalization. Everyone is so obsessed with what is happening in Japan and the hunt for yield that the real trade has been missed,” he added. The yuan trading band was last widened a year ago.

Chinese leaders are due to meet with US Treasury Secretary Jack Lew and Secretary of State John Kerry in Washington in July, by which time Oakley expects the Chinese leadership to want to come armed with some positive news on how China is taking steps towards full liberalization of its currency.

China`s tight controls on its national currency have long been an issue of contention between the world`s two largest economies. The US has in the past accused China of deliberately keeping its currency weak to make its exports more attractive, and putting US exporters at a disadvantage.

“We think the strong point of the yuan is going to occur during the week of strategic economic dialogue…in the second week of July. They will want to show up in Washington and say we are moving towards currency liberalization and guess what we have just widened our currency band. I think the widening band will be doubled,” added Oakley.

According to Stephen Schwartz, Asia chief economist at Spanish bank BBVA, Chinese authorities have displayed the willingness to allow market forces to determine the yuan`s value.

“They have tightened some regulation to prevent shorting of the currency and are clamping down on these illegal hot money inflows. But it is interesting that they are not intervening to manage the exchange rate to keep it from appreciating faster…I think one could read a positive view of this that they are allowing market forces to determine the exchange rate,” he added.

– By CNBC.Com`s Katie Holliday; follow her on Twitter @HollidayKatie

More CNBC stories 
A Big Red Panic Button for Stock Exchanges
The Race to Cut Rates: Look What Japan Started
Jobless Claims Are the Next Test for Rally

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

‘Bear market checklist’ goes a perfect 0-for-6

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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David Darst has six boxes on his bear market checklist, and none of them are filled in yet.

The Morgan Stanley chief investment strategist is a realist-cautious but not cowering, optimistic but not overzealous.

So when he looks at the current bull market, he certainly sees danger that conditions could change, particularly in the case of policy mistakes.

But the current trajectory is higher.

“The market`s running,” Darst said during the opening day of the SkyBridge Alternatives Conference in Las Vegas. “When cookies are passed, grab the cookies and realize they may not come back around again, and it`s not always going to be thus.”

The checklist:

1. Is the Federal Reserve tightening monetary policy?
   
   
2. Are stock price valuations stretched?
   
   
3. Is investor euphoria present?
   
   
4. Are bond spreads widening?
   
   
5. Is there a recession looming?
   
6. Are transportation stocks, small caps and bank stocks retreating?
   

“Right now we are 0-for-6 in the bear market checklist,” Darst said. 

In spite of the seemingly easy path to more gains for the stock market , which is up the more than 20 percent from its last low required for a technical bull market, there is still plenty of fear in the market.

Many market experts believe that the main propulsion behind the surge has been the Fed, which is buying USD 85 billion in Treasurys and mortgage-backed securities each month in an effort to keep liquidity flowing.

Also, geopolitical factors continue to spark concern, particularly over a slowdown in China and another flare-up in the European debt crisis.

This year has seen the first consistent inflows in stock-based mutual funds since the financial crisis began, but investors are still cautious and pouring just as much cash into bond funds.

“Nobody is buying stocks, and they will someday,” Darst said. “There will be a coil-spring reaction.”

By CNBC.com Senior Writer Jeff Cox. Follow him on Twitter @JeffCoxCNBC.com .

More CNBC stories
A Big Red Panic Button for Stock Exchanges
The Race to Cut Rates: Look What Japan Started
Jobless Claims Are the Next Test for Rally

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

May: The month dollar-yen finally breaks 100?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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April just wasn`t meant to be the month for the dollar to push decisively above 100 yen. Perhaps May will be, given hopes of stronger US economic news after Friday`s upbeat payrolls data, currency analysts said.

The dollar was trading around 99 yen on Monday, hovering within sight of the key 100-barrier it tested on a number of occasions last month but failed to break.

(Read More: Close, Yet So Far – Yen Takes Another Stab at 100 )

“I think dollar/yen going through 100 this week is a reasonable expectation,” said Richard Yetsenga, head of global markets research at ANZ.

“Most of us in the market had expected 100 to break before now and it hasn`t, mostly because of two things: One is the slowdown in the US numbers and the second is people adjusting to the fact that there isn`t an avalanche of capital coming out of Japan,” Yetsenga said.

(Read More: Why Are Japanese Still Dumping Foreign Bonds )

“I suspect those two are close to running their course, so expect dollar/yen to break 100 near-term,” Yetsenga added.

Analysts say that the one driver behind the yen`s weakness has been an expectation of capital outflows from Japan. While that has not materialized significantly, it`s expected to do so in the months ahead as heavy bond buying by the Bank of Japan to stimulate the economy forces big institutional investors to shop abroad for foreign bonds and other assets.

Data on Friday showing the US economy created 165,000 new jobs last month, higher than expectations for a gain of 145,000, followed a batch of weak data that had raised concerns about the outlook for the world`s biggest economy and in turn stalled the rally in the dollar.

The upbeat U.S. payrolls number has renewed appetite for risk assets, lifting the SandP 500 and Dow Jones stock indices to all-time closing highs on Friday and helping push Asian stock markets higher on Monday.

The dollar has risen some 25 percent against the yen since November, largely as a result of weakness in the Japanese currency as Japan embarks on a policy of radical monetary easing to kick start growth and end years of deflation.

And having risen quickly in such a short space of time, analysts had said the markets were looking for another incentive to push the dollar higher and knock the yen lower, through the psychological barrier of 100.

“We have now moved aggressively higher once again, and the countdown to breach the psychological 100 mark is back on. Perhaps tomorrow [Tuesday] will finally be the day after an extended holiday weekend,” Jason Hughes, head of sales trading at CMC Markets, said in a research note, referring to the closure of Japanese markets on Monday for a public holiday.

Other analysts remained skeptical about whether any break of the elusive 100-level could be sustained.

“We could revisit [that] 100 level soon, but I don`t think we will see a sustained break,” said Chris Tedder, research analyst at Forex.com.

“We just don`t see the interest in the market for a push above that level. So overall, if we do spike up to 100, we don`t see a sustained break until we get some more guidance from the Bank of Japan and we don`t expect to get that in the coming weeks,” he said.

(Read More: Has the Yen Hit Bottom Against the Dollar Already? )

– By CNBC.Com`s Dhara Ranasinghe, Follow her on Twitter: @DharaCNBC

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Has the dollar-yen topped out already?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A 2 percent rise in the yen`s value since Friday has some currency analysts calling a top on dollar-yen, just days after the currency pair looked poised to break through the key 100-barrier.

Bets to sell the yen appear to be off the table for now following Friday`s weaker-than-expected U.S. economic growth numbers and uneventful Bank of Japan meeting.

The yen rose to 97.33 per dollar on Monday, its strongest level against the dollar in more than a week and well off a four-year low hit just shy of 100 earlier this month.

“In the near term, dollar-yen is looking a bit vulnerable,” said Sean Callow, senior currency strategist at Westpac bank, who forecasts the yen to strengthen to 96 per dollar over the next month and to 93 by December. A move to 93 would imply a gain of more than 4 percent for the yen from current levels.

The Bank of Japan on Friday reiterated that it would pump $1.4 trillion into the economy to revive growth and end deflation. But doubts from central bank members over whether the BOJ can meet its inflation target of 2 percent in two years prompted some yen buying.

Data showing the U.S. economy grew by an annual rate of 2.5 percent in the first quarter, down on expectations of 3 percent growth, provided traders with another reason to sell the dollar and buy the battered yen.

According to Callow, two factors could now drive further yen gains: broad weakness in the dollar following softer U.S. data and the continued selling of foreign bonds by Japanese domestic investors.

“The latest data from the Ministry of Finance has shown that but for all of one week since January, Japanese investors have been net sellers of foreign bonds. Until they stop doing that, we could see continued strength in the yen,” said Callow.

Japanese Prime Minister Shinzo Abe`s pledge to turn the world`s third largest economy around, partly through aggressive monetary easing, has knocked more than 20 percent off the yen`s value against the dollar since November.

However, the weakening trend has slowed in recent weeks as the dollar failed to push above the key 100 dollar level, having flirted with the barrier on several occasions. Analysts say that options barriers may be a reason why the 100-level appears out of reach for now.

Watch Those Speculators

“For the time-being yen weakness is reliant on foreign traders and hedge funds shorting the yen. If we see hedge funds start to take profits that could also drive further strength in the currency,” said Westpac`s Callow.

Craig Chan, head of FX strategy, Asia ex-Japan at Japanese investment bank Nomura, said it was too early to call a top on the dollar-yen pair. He forecast the yen to weaken to 100 against the dollar this quarter and reach 102 by December.

“We are still on an upward trajectory on dollar-yen, and I still expect the yen to break the 100 barrier,” he said. “The recent (yen) strength is just a reaction to the Bank of Japan meeting where nothing new happened.”

With an important election coming up in July, Chan expects Prime Minister Shinzo Abe will strive to keep market sentiment strong by making sure the aggressive monetary policy action he has promised is put into action, a move that points to further yen weakness, he said.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why hype over dollar-yen at 100 is overdone

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Currency markets have been on tenterhooks this week to see if the yen will finally hit the psychologically important level of 100 against the dollar. However, some analysts say the significance of such move should not be overdone.

“I think it could very well be today or this week, we are very close [to the yen hitting 100 per dollar]… But I don`t think there is nearly enough significance in hitting that level as one might think,” said Ilya Spivak, currency strategist at forex news site DailyFX.com.

Also read: Indian Rupee opens at 54.18/dollar, gains 20 paise

“If dollar/yen were to close above 100 and push meaningfully higher, that would be something. But without fundamental follow-through, it could be a hit that really peters out,” he added.

The yen weakened to around 99.94 against the dollar in early April after the Bank of Japan unveiled radical monetary policies. It flirted with the level again this week amid relief that G-20 nations shied away from criticizing Japan`s monetary policies at a gathering last week.

On Wednesday, the currency traded at about 99.5 to the dollar. It has weakened about 25 percent against the greenback since mid-November when Shinzo Abe, elected as Prime Minister in December, first pledged to revive the flagging Japanese economy.

Japan`s economic policies received some negative attention this week, after credit ratings agency Standard and Poor`s and the Organization of Economic Cooperation and Development both questioned the nation`s ability to revive economic growth.

The OECD praised Japan`s quantitative easing program, but urged structural reform, while SandP expressed doubts over whether the Japanese government could win its battle with deflation.

Other analysts say the 100-barrier on dollar/yen is an important psychological level for good reason.

“Yes it is just another number, but when you see it switch over to three numbers in front of the decimal point, that is a big psychological hurdle. We haven`t been there for a really long time,” Keagan York, head of FX strategy at Compass Global Markets told CNBC.

Another reason why a sustained move through 100 could be significant is that it could trigger renewed criticism about the level of the yen globally, analysts said.

Japan came under fire earlier this year from neighboring economies for pursuing policies that weakened its currency and gave exporters a competitive edge. And although Japan escaped directed criticism at the latest G-20 meeting, currency analysts say fears of a `currency war` could come back if the yen breaks through the 100-barrier.

“It is a possibility that if you unbalance the natural markets, other countries are going to catch up. Everybody is striving to keep the momentum building and keep their inflation above zero percent,” he said.

“It wasn`t that long ago we saw the Asian economic crisis and it is still in the forefront of (central bank) governors` minds, so the focus is going to be to keep their economies moving,” York added. “So if they have got to play with fire, then they have got to play with fire.”

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mark Mobius: Here’s why I am still bullish on China

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Leading emerging markets investor Mark Mobius is still bullish on China, despite the country`s disappointing economic growth in the first quarter.

“The new administration in China is just getting its game going, I think that growth engine will continue and so we remain bullish on China,” Mobius, executive chairman of Templeton Emerging Markets Group, told CNBC on Thursday.

China, which is currently the world`s second largest economy, will grow at 7-8 percent per annum over the next few years, forecast Mobius.

Although China has seen a 10 percent correction in mainland equities over the past two months, Mobius remains confident, and said that any investment exposed to Chinese consumers could prove attractive.

“Once the banks get their balance sheets in order, they will be attractive as they are consumer related, along with the oil companies, which are consumer led to some extent,” he said.

Mobius, who has more than 30 years of experience in emerging market investing, also favors frontier markets. “Frontier markets are where the action is now. When you look at Africa, there are lots of liquidity problems but it still looks very compelling,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Where’s gold headed? It’s anybody’s guess

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As gold bounces back from its worst two-day sell-off in 30 years that spooked investors and upset market estimates, analysts remain divided on where gold prices are headed from here.

In the bear camp, Andrew Dale, Asia head of resources research at Macquarie Securities, told CNBC that gold doesn`t appear to have much steam to go beyond USD 1,400 an ounce.

“The investment drivers for the metal have come under pressure and there`s no reason right now to see any huge gains back to previous levels,” Dale said, citing easing inflation, the strength of US equity markets and outflows from exchange-traded funds as the major causes behind the weakness in gold.

The precious metal that hit a two-year low of USD 1,321 per ounce on Tuesday was trading 0.6 percent higher on Wednesday in Asian trade. It is still, however, down about 18 percent year to date and far away from its peak of USD ,1,920 reached in September 2011.

Gaurav Sodhi, resources analyst at investment firm Intelligent Investor, said the sentiment for gold has changed after a 12-year bull run and he doesn`t expect it to “alter” anytime soon.

“I think what we`re seeing today [Wednesday] is just a bounce and there could be further weakness in that gold price,” Sodhi said.

Last week news that Cyprus could be selling its gold to fund its debt scared markets and this could set the precedence for other European central banks to follow suit, Sodhi added.

But the bearish sentiment is contrasted by optimism that gold will head higher after this rout. According to HSBC, a recovery in jewelry and gold coin sales, stimulated by demand from India and China and mine expansion plans as productions costs fall will lead prices higher.

“It may take a long time for investor confidence to return. But we do believe gold is becoming oversold and that tighter supply/demand fundamentals and a still positive macroeconomic background, will eventually lead to a steady grind higher,” HSBC said in a note.

Bank of America Merrill Lynch Global Research backed that sentiment saying a pick up in jewelry demand should support the USD 1,500 an ounce level, adding that it`s “highly unlikely” that other European periphery countries like Portugal and Greece would start selling their gold.

Accelerating inflation, European central bank easing and emerging markets buying gold for reserves will support gold prices in the second half of the year, according to BofA Merrill Lynch Global Research.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Scariest part of gold crash? No one knows why it happened

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The two-day crash in the price of gold is one of the most devastating asset sell-offs ever witnessed on Wall Street, right up there with the stock market crash of 1987. What makes it that much worse is no one is exactly sure why it happened. And until investors get some answers, the selling may continue, they say.

“Unless you have a catalyst, ‘cheap’ gets a lot cheaper during a crash in price expectations,” said Keith McCullough of Hedgeye Risk Management. “Old Wall calls it ‘catching a falling knife’ for a reason.”

Gold posted its biggest two-day dollar drop ever and its biggest percentage drop since 1980 when the carnage settled Monday. Prices rebounded slightly in early trading Tuesday. It’s now down 26 percent from its 2011 high.

“We are running out of superlatives to attach to the gold price move since last Friday,” Nomura analyst Tyler Broda wrote in a note to clients. “The rarity of a move like this is notable.”

Also Read- Gold May Head ‘Much Lower’: Broda

It seems like every trader on Wall Street has a theory for the move. Most commonly cited are fears of central bank selling (especially Cyprus), exchange-traded funds liquidation, global deflation setting in, a weak yen strengthening the dollar, and mysterious hedge funds blowing up from margin calls.

“The major holders of gold other than the US (i.e., the EU and England) need gold to support their economies and banks,” said Sean Egan of Egan-Jones research. “A little selling has a major impact on supply and feeds price declines and follow-on selling.” But the Cyprus theory has yet to be proven. Reportedly, there is an internal debate still raging inside Cyprus to sell gold to pay its growing bailout tab, but they have not sold any gold yet.

Many say there may not be a fundamental reason to pinpoint for the bullion crash. After all, the metal has no fundamentals like cash flows or dividends, so it is only worth what others are willing to pay for it. After a 13-year run, perhaps it was time for other assets like Treasurys and high-yielding stocks to gain favor among the safe-haven crowd.

“Commodities trade even more technically than other assets since it’s futures driven,” said Enis Taner, global macro editor for RiskReversal.com. The crash “was technical more than anything in my view.”

Taner points to the USD 1,530 to USD 1,550 area for gold, which was support for the metal for almost two years. Once it broke below that, the rush for the exits started.

And that’s where a new facet of this trade, which was not around in 1980, may have thrown fuel on the fire: ETFs. They give the average Joe access to the gold futures market and these less sophisticated investors may not have the same pain threshold or capital as institutional investors.

Also Read- Mark Fisher: Gold Bulls Should Love This

The SPDR Gold Trust, the most popular gold ETF, traded 150 million shares during the two-day slam, more than the total volume of the previous 16 days. This smacks of panic selling.

“The gold market metrics are in uncharted territory,” said David Greenberg of Greenberg Capital. “The GLD effects on gold in a panic sell-off have never been tested.”

History has shown that once gold enters a bear market (20 percent off high), it keeps going lower by another 14 percent on average, according to data going back to 1975 crunched by Bespoke Investment Group. That would put the metal well below USD 1,300.

“While no one of these explanations may be sufficient to explain a 20 percent move, collectively they all matter,” said Robert Savage, chief strategist at FX Concepts and previous director of FX macro sales at Goldman Sachs. “Gold is unlikely to bounce much—it’s a heavy metal after all—with the larger medium term risk of USD 1,100.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow