Markets Metals & Miners

US markets spent Wednesday on a roller coaster ride, with the Dow up 200 points and then down 100 points traders seemed uncertain where they wanted to go. Oil prices continued to weigh on markets as traders seem edgy as the Federal Reserve meeting draws closer. The Dow Jones eased 0.4 per cent at the close of trade, while the S&P 500 slid 0.8 per cent and the tech-heavy Nasdaq slumped 1.5 per cent. The Dow had jumped around 1 per cent near the opening bell before crude’s retreat hit hard.

M&A activity also impacted trade as a mammoth $170 billion-plus merger of equals between Dow Chemical and DuPont was seen close to being sealed. The two chemicals giants surged over 10 per cent and remain on track for record-setting days.

Across the Atlantic, France’s CAC 40 slid 1 per cent, while Germany’s DAX 30 gave back 0.8 per cent as investors continued to sell-off European stocks in the wake of last week’s ECB meeting. Outside the Eurozone, the UK’s FTSE 100 inched down 0.1 per cent, with its fifth straight day of losses coming despite sharp gains for mining stocks.

Dual-listed mining giants BHP Billiton and Rio Tinto both soared close to 4 per cent in London trade, while Glencore recovered 4.6 per cent. The latter is no longer the worst performer on the FTSE 100 this year, with rival Anglo American claiming that unwanted honor overnight. The two firms have tanked over 70 per cent in 2015.

The stock-market rout in the last three sessions, fuelled by the oil slump, has pushed many international equity indexes over two standard deviations below their 20-day moving average.

Asian stocks slipped on Thursday as weak oil prices continued to feed global growth worries, while the euro held solid gains after a policymaker poured cold water on market expectations of more easing by the European Central Bank. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3 percent.

Japan’s Nikkei fell 1.3 percent to hit a five-week low and Australian shares dropped 1.5 percent.     Chinese and Indonesian shares were the only gainers, with the CSI300 rising 0.7 percent and the Jakarta Composite advancing 0.2 percent.

Gold reversed recent gains to fall $2.50 in the Asian session reaching 1074.00 while silver took cues from gold but remained at the $14 trading level. Gold moves in the opposite direction to the dollar, against which it is used as a hedge. Holdings in SPDR Gold Shares  – which accounts for more than 40% of the total ETFs traded – have fallen by 62.7 tonnes since mid-October when inflows sent total holdings briefly back above 700 tonnes. Total holdings have now fallen to 634.6 tonnes or 20.4 million ounces worth $22 billion. Once the largest ETF in the world, in June this year GLD dropped out of the top ten with assets under management more than $50 billion below its 2011 peak.

Holdings have fallen to the lowest since 19 September 2008. The collapse of Wall Street investment bank Lehman Brothers sparked the global financial crisis occurred September 15 that year. Total assets in the dozens of gold-backed ETFs listed around the world dropped to 1,465.2 tonnes on Monday according to Bloomberg data. Global ETF vaults held a record 2,632 tonnes or 93 million ounces of gold in December 2012.

Copper saw a bit of light gaining 3 points. 2.069 inching up to the top of its December trading range. Soft demand is clearly not helping commodity prices. China and other emerging markets like Brazil have slowed dramatically in recent quarters, lowering their appetite for things like steel, iron ore and copper. This means markets are bracing for more plant closure and announcements like the one announced by Anglo American. In the U.S., roughly 123,000 jobs have disappeared from the mining sector, which includes oil and energy workers, since the end of 2014, according to government statistics. It’s also likely some companies won’t survive the depressed pricing environment. Financial trouble for commodity companies have already lifted global corporate defaults to the highest level since 2009, according to Standard & Poor’s Ratings Services.