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Silver, Gold Rise to Records as Asian Stocks Fall; Yen Weakens

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Silver, Gold Rise to Records as Asian Stocks Fall; Yen Weakens
By Shiyin Chen and Yumi Teso - Apr 25, 2011 2:15 AM PT

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Silver and gold climbed to records, oil rose for a fourth day and Asian stocks fell amid concern accelerating inflation will undermine the region’s economic recovery. The yen weakened against all 16 of its counterparts.

Cash silver advanced 4 percent as of 9.58 a.m. in London after earlier surging 5.4 percent. Gold climbed for a ninth day, while crude oil increased 0.4 percent in New York. The MSCI Asia Pacific Index slid 0.2 percent as companies from Posco (005490) to Acer Inc. (2353) posted lower profits. Standard & Poor’s 500 Index futures increased 0.3 percent. Malaysia’s ringgit strengthened below 3 to the dollar for the first time in more than 13 years. The yen weakened to 119.71 per euro from 119.24 last week.

China’s Shanghai Composite Index led losses in Asia after China International Capital Corp. said the nation’s consumer prices may rise as much as 5.5 percent this month. Singapore’s inflation held at 5 percent in March, a government report today showed. Data this week may show Japan’s retail sales sank last month and U.S. gross domestic product growth slowed, leading central banks from the two nations to keep interest rates near zero, according to economists surveyed by Bloomberg.

“It’s very clear that some Asian countries will keep raising rates more while their economies are strong enough to see more hikes,” said Hideki Hayashi, a global economist at Mizuho Securities Co. in Tokyo. “On the other hand, market players expect the U.S. this week to suggest it would keep low rates for some time, which means more yield appeal for Asia.”
Silver Doubles

Silver, which has more than doubled over the past year, traded at $49.0925 per ounce after earlier reaching a high of $49.79 as investors sought precious metals as a store of value. Gold for immediate delivery rose as much as 0.8 percent to a record $1,518.32 an ounce, before trading at $1,517.38.

Corn for July delivery surged as much as 2.6 percent to $7.64 a bushel on speculation that wet, cold weather across the U.S. Midwest will further delay planting, reducing yields. Wheat increased as much as 2.7 percent to $8.57 a bushel.

Oil for June delivery increased 0.4 percent to $112.74 a barrel on the New York Mercantile Exchange, after Syrian security forces detained at least 200 people following the killing of anti-government protesters and U.S. Senator John McCain said rebels in Libya need more assistance in the fight against Muammar Qaddafi’s forces.

The jump in commodity prices is fueling speculation policy makers in Asia will step up tightening efforts. The Singapore dollar was little changed at S$1.2335 versus the greenback after touching S$1.2318. The central bank said April 14 it would allow further appreciation. The Malaysian ringgit gained as much as 0.5 percent to 2.9910, the strongest level since Oct. 9, 1997, on speculation the central bank will raise interest rates next month to help damp inflation.
‘Imported Inflation’

“There’s a perception that central banks in Asia are allowing their currencies to appreciate so as to curb imported inflation,” Lee Wai Tuck, a strategist at Forecast Pte in Singapore, said in a Bloomberg Television interview. “There are some concerns that if currencies do not appreciate, inflation may go even higher” in countries including China and Singapore, he said.

The yen weakened to 82.02 per dollar from 81.88. Japan’s retail sales dropped 6.1 percent in March from a year earlier after rising 0.1 percent in February, according to the median estimate of economists in a Bloomberg News survey before the government data due April 27.
BOJ, FOMC

The Bank of Japan may cut its forecast for real growth for fiscal 2011 to 0.8 percent from 1.6 percent as a result of the March 11 earthquake, the Nikkei newspaper reported today. The central bank will keep its benchmark interest rate at a range between zero and 0.1 percent at its next meeting, according to all of 13 economists surveyed by Bloomberg News.

The Federal Open Market Committee will hold the benchmark rate in a range of zero to 0.25 percent on April 27, according to all 80 economists surveyed by Bloomberg. GDP rose at a 1.9 percent annual pace after increasing at a 3.1 percent rate in the previous three months, according to the median estimate of 66 economists surveyed by Bloomberg News before an April 28 Commerce Department report.

The Dollar Index slid 0.2 percent to 73.936 after earlier falling as much as 0.3 percent. The gauge, used by IntercontinentalExchange Inc. to track the greenback versus the currencies of six major U.S. trading partners, touched 73.735 on April 21, the lowest since August 2008.
‘Weak’ Yen, Dollar

“Japan and the U.S. are the countries that can’t steer toward monetary tightening, so the yen and dollar will be weak,” said Daisaku Ueno, president of Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency margin company.

About four shares declined for every three that climbed on MSCI’s Asia Pacific Index, which rallied 2.2 percent last week. That was its steepest weekly gain in a month. The Shanghai Composite dropped 1.5 percent, led by China Petroleum & Chemical Corp. (600028) and China Shenhua Energy Co., after CICC said consumer prices may rise between 5.2 percent and 5.5 percent in April. The government has a full-year inflation target of 4 percent.

Shipping shares advanced, led by Taipei-based Evergreen Marine Corp., after KGI Securities Co. said in a report today “peak demand” and container shortages would boost its third- quarter earnings. Kweichow Moutai Co., China’s biggest liquor maker by market value, gained 3.9 percent after reporting a 49 percent increase in first-quarter net income.
Earnings

Posco slipped 1.9 percent after the world’s third-biggest steelmaker by output said first-quarter profit dropped 33 percent. Acer sank 3.1 percent after the world’s second-largest supplier of notebook computers reported the lowest quarterly profit in six years. Reliance Industries Ltd. (RIL), India’s biggest company by market value, fell 2.7 percent after posting net income that missed analyst forecasts.

Since April 11, just 45 percent of the 60 members on the MSCI Asia Pacific that reported per-share earnings have beat analyst predictions, compared with about 71 percent on the MSCI World Index members, according to data compiled by Bloomberg.

Futures on the S&P 500 indicate shares may climb today as companies from Advanced Micro Devices Inc. to SanDisk Corp. posted earnings that beat analyst estimates. U.S. stock markets were closed on April 22 for a holiday.

Exchanges from Australia to the U.K. and Germany remain shut today.

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Yumi Teso in Bangkok at yteso1@bloomberg.net.

To contact the editor responsible for this story: Patrick Chu in Tokyo at pachu@bloomberg.net

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The Federal Open Market Committee
will hold the benchmark rate in a
range of zero to 0.25 percent on April 27, according to all 80
economists surveyed by Bloomberg.

NOT with the IMF slamming the FEDS in news articles...80 economists? what do they know, they are all "fiat system" thinkers!!!

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