How to start investing in gold – and the major benefits and drawbacks to know about

gold bars
Gold is seen as a safe haven investment in uncertain times, a hedge against inflation and paper assets.

  • Individual investors can invest in gold in two ways: physical bullion (bars or coins), or securities (stocks, funds) that represent gold.
  • While bullion is a more direct, “pure” way to own gold, securities are easier to hold and can appreciate.
  • Analysts recommend investing 5 to 10% of your portfolio in gold, as a long-term inflation hedge and diversifier.
  • Visit Insider’s Investing Reference library for more stories.

Ah, gold. It’s rare, accepted everywhere, and governments can’t print it at will. These are the reasons that some folks – fondly known as “gold bugs” – have always invested heavily in the honey-hued metal. And in times of financial chaos, they’re not the only ones.

“History has shown that during economic slowdowns, from the Great Depression to the COVID-19 pandemic, gold appreciates in value,” says financial analyst James Jason of Mitrade, a commodities trading platform.

No matter what the state of the economy, gold offers a good way to diversify your assets. Many financial advisors recommend keeping anywhere from 5% to 10% of your portfolio in it – perhaps up to 15% in times of crisis.

Individuals have two main ways to invest in gold:

  • Physical gold, or bullion (the most obvious, but not necessarily the least expensive)
  • Gold securities such as stocks, funds, and futures (less of a pure play, but more convenient)

Let’s go digging into both.

How to invest in physical gold

Physical gold comes in many forms and sizes, each with its own characteristics and costs.

Gold bullion

Bullion often refers to gold in bulk form, usually bars or ingots. Typically, gold bars are poured and ingots are pressed (a cheaper production method). As a result, bars command a higher premium, or added cost, over the daily spot price of gold than ingots.

Ranging in size from quarter-oz. wafer to a 430-oz. brick, bars, and ingots are stamped with purity, origin, weight, and where the bullion was minted. Not all gold is equal, especially when it comes to purity and weight. Investment-grade gold is at least 99.5% pure.

Bullion bars and ingots are sold by banks and gold dealers. Banks often offer physical gold at a lower-markup than dealers but finding a branch that actually has it may be harder.

Gold coins

Minted coins are another common way to buy physical gold. Not to be confused with old rare coins that numismatists collect, these coins are new, minted by governments for investors. The prices they fetch are based on their gold content -aka their “melt value”- plus a 1%-5% premium.

Although several governments issue gold coins, for maximum liquidity, most buyers stick with the most widely circulated and recognized:

  • American Gold Eagle
  • Australian Gold Nugget
  • Canadian Maple Leaf
  • South African Krugerrand

Minted bullion coins are available from major banks, coin dealers, brokerage firms, and precious metal dealers.

Pros and cons of physical gold

For many people, the whole point of owning gold is to own the physical stuff. It’s the actual metal that has most of the inherent investment advantages.

Advantages of physical gold

  • Inflation hedge. Advocates argue that, as a tangible asset, gold maintains an intrinsic value that always reflects the cost of living. There’s an old saying that an ounce of gold equals the cost of a quality business suit. That held in 1934 when men’s suits fetched $35, and it does today too, with gold close to $2,000 an ounce (of course, that suit better be a Boglioli).
  • Counterweight to stocks. Like other commodities, gold acts as a counterfoil to equities, usually moving in the opposite direction of the stock market. Case in point: When the subprime mortgage meltdown began in 2008, ushering in the Great Recession, gold-which for years had been trading in the $400-600 range-shot up to $1,000 per ounce and kept going for the next three years.
  • Safe haven. Gold’s seen as a safe haven in uncertain times or whenever there’s socio-political turmoil. After the 2016 Brexit vote, its price rose over 10% in one month, for example. “Owning gold,” says Dennis Notchick, a certified financial planner at Stratos Wealth Advisors, “appeals to individuals who are concerned about the collapse of global markets or other threats to a government’s ability to back its currency.”
  • Virtually indestructible. “Physical gold cannot be hacked or erased,” says Charles Stevens, COO of Bullion Box Subscriptions. (Remember, we’re thinking in catastrophic terms here.) “Gold cannot be destroyed by a natural disaster and it will not get worn down in time.”

Drawbacks of physical gold

  • Expensive to hold. Storing gold at home carries enormous risks of theft or loss. Keeping it in a commercial facility incurs storage costs, often based on the size and value of the holdings (anywhere from .5% to 2%). If you’re not using a professional storage facility, you’ll want to insure your gold, too – another ongoing charge.
  • Illiquid. Physical gold can’t be sold with a press of the button or a call to a broker. Even with dealers acting for you, a sale can get days or weeks to settle, plus you have to arrange for shipping.
  • Does not produce income or profit. A $1,000 investment in bullion buys $1,000 – period. Physical gold doesn’t generate interest or dividends. The only potential for appreciation is if there’s a jump in prices that lets you sell at a profit (and even that can be compromised by the time, effort, and various assessment costs that accompany selling).

How to invest in gold securities

Given the hassles and limits of bullion, gold securities – in the form of stocks, funds, or options – are often a better choice, especially for novice investors.

They may not be as pretty, but they’re infinitely more practical:

Gold stocks

Buying shares of companies in the mining, refining, or other aspects of the gold production business is one way to play. About 300 of these companies, aka “miners,” are listed on major stock exchanges. Their share prices generally reflect the movement of the metal itself. However, “the growth and return in the stock depend on the expected future earnings of the company, not just on the value of gold,” notes the World Gold Council, an industry trade group.

Gold ETFs and mutual funds

More conservative investors can buy shares in gold-oriented mutual funds or exchange-traded funds (ETFs). These funds have varying investment approaches: gold-backed ETFs tend to invest directly in physical gold, while mutual funds favor gold mining stocks. Some funds invest in both. But all offer a liquid, low-cost entry into the gold market that is more diversified, and so lower-risk, than buying equities outright.

Gold options

More seasoned investors might consider an option on a gold futures contract. Like any financial option, these represent the right – but not the obligation – to buy or sell an asset (gold in this case) at a specific price during a specified window of time. You can buy an option to bet on whether gold’s going up or going down, and if the market moves the opposite way, all you’ve lost is the small amount you’ve paid for the option.

Gold options trade on a division of the Chicago Mercantile Exchange (CME) known as COMEX. Gold options can be bought on gold bullion or on gold ETFs.

Pros and cons of gold securities

Like any financial asset, gold securities have both benefits and drawbacks.

Advantages of gold securities

Along with some of the general benefits of gold ownership, securities offer:

  • Liquidity. Trading as they do on major exchanges, gold securities are obviously easier to buy and sell than bullion. No storage costs, either – aside from any management or account fees your broker or fund manager might charge.
  • Compounded returns. While dividends offered by miners are typically average at best, they are greater than no dividends at all, which is what you get from physical gold. And there is also the possibility of appreciation in the share price.
  • Low initial investment. The most cost-efficient way to invest in general, mutual funds and ETFs let you in on the game at a far lower cost. With the spot price of an ounce of gold around $2,000, $180 for a share of the SPDR Gold Shares ETF (GLD) – equal to 1/10th of an ounce of gold – is, well, spot on.

Drawbacks of gold securities

  • Volatility. Just as with any company, a miner’s operating costs, reserves, and management all play a factor in its performance. As a result, shares prices tend to be more volatile: If bullion sinks 10%, gold stocks often plummet 15%. Miners definitely “have a higher speculative aspect to them,” says investment strategist Lyn Alden, who follows precious metals and currencies.
  • Systematic risks. A gold mining company’s share performance also reflects in political and economic conditions in its native country. Some of the biggest operations are in Africa, Russia, and Latin America – places that have known their share of turbulence and are often avoided by socially responsible and institutional investors.
  • You don’t own gold. Gold securities are less of a pure play. They represent physical gold but you don’t have the right to redeem them for the actual metal. So they don’t provide the protection against a paper currency or financial market meltdown that the metal itself does.

The financial takeaway

So, should you go for the gold? Though it usually becomes part of the conversation during times of economic crisis or political uncertainty, gold as part of your portfolio makes sense anytime – as a diversifier of your holdings, if nothing else.

But how much to invest, and what form to invest in, depends on your own tolerance for risk and desire for convenience.

Digital assets are becoming the new normal – here’s how to buy cryptocurrencyStart investing in mutual funds in 4 stepsWhat to know about staking – the process of locking up crypto holdings to earn rewards and interest5-step beginner’s guide to investing in index funds

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US stocks rise as strong corporate earnings outweigh inflation concerns

A stock trader claps at the end of trade at the New York Stock Exchange
A stock trader claps at the end of trade at the New York Stock Exchange

US stocks notched new highs on Wednesday as strong strong corporate earnings outweighed inflation and supply chain concerns.

The benchmark S&P 500 closed higher for the sixth straight session, buoyed by stronger than expected third-quarter earnings reports. The Dow Jones Industrial Average scaled new intraday highs, though failed to hit a closing record. The tech-heavy Nasdaq slipped, dragged by Netflix’s outlook of decreased profitability.

A majority of companies that have reported earnings have beat analyst expectations so far. “Indeed, the selloff from September feels like an increasingly distant memory now,” Deutsche Bank analysts said.

Here’s where US indexes stood at the 4:00 p.m. ET close on Wednesday:

Equities have been boosted by strong earnings reports, defying more muted expectations due to ongoing supply chain disruptions that have pushed prices of goods higher and the persistent labor shortages that have slowed the economic rebound.

“We believe that the stock market has more to climb in this bull market and that some of the COVID-19 headwinds are receding even as inflation increasingly becomes a headwind,” Chris Zaccarelli, CIO at Independent Advisor Alliance, said in a Wednesday note. “Many companies continue to have pricing power, which should preserve corporate profits.”

Fundstrat Global Advisors on Wednesday formally raised its S&P 500 year-end target to 4,800, representing potential upside of about 7% as risk-on sentiment increases.

“The improvement in market technicals, such as clearing the 50-day moving average, is actually suggesting that underlying trends are getting stronger,” head of research Tom Lee said.

The yield on the benchmark 10-year Treasury note rose to 1.648% – a level last seen in May – compared to Tuesday’s 1.634%. Yields rise when bond prices fall.

In cryptocurrencies, bitcoin climbed to a record high of $66,909, a day after ProShares Bitcoin Strategy ETF had the second-biggest trading debut of all time.

If the bitcoin manages to see consecutive daily closes above former resistance at $65,000, Fairlead Strategies’ Katie Stockton believes it will hit $89,800, representing potential upside of 38% from the breakout.

Ahead, asset management firm VanEck looks set next week to launch an ETF tied to bitcoin futures after October 23 on the Cboe BZX Exchange, according to a company filing Wednesday with the Securities and Exchange Commission.

West Texas Intermediate crude oil rose 1.55%, to $84.25 per barrel. Brent crude, oil’s international benchmark, tacked on 0.78%, to $85.74 per barrel.

Gold jumped as much as 0.88%, to $1,784.69 per ounce.

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US stocks edge higher as investors digest wave of corporate earnings results

Traders work at the trading floor in the New York Stock Exchange on Aug. 19, 2021.
New York Stock Exchange on Aug. 19, 2021.

US stocks traded mixed on Wednesday as investors digest a wave of corporate earnings results for the third quarter.

A total of 57 companies in the US have reported earnings so far, 50 of which have beat expectations, Deutsche Bank strategists said. “Indeed, the selloff from September feels like an increasingly distant memory now,” they added.

The benchmark S&P 500 edged higher after a five-day rally. It clinched its highest close in six weeks in the previous session.

Here’s where US indexes stood at the 9:30 a.m. ET Wednesday:

Equities have been boosted by strong earnings reports, defying more muted expectations due to ongoing supply chain disruptions that have pushed prices of goods higher and the persistent labor shortages that have slowed the economic rebound.

Fundstrat on Wednesday formally raised its S&P 500 year-end target to 4,800 — 100 bases points higher – reflecting a 7% upside.

Tom Lee, head of research, cited strong seasonality, bitcoin rallying to new highs, and the pandemic showing signs of consistent improvement in the US.

In cryptocurrencies, bitcoin inched towards new all-time highs on Wednesday, reaching an overnight high of $64,500, as investors were encouraged by the red-hot market debut of the world’s first futures exchange-traded fund the previous day.

The ProShares Bitcoin Strategy ETF was the second most traded debut ETF ever, with more than $1 billion worth of shares traded on its first day.

Oil slightly retreated Wednesday after the Chinese government threatened to intervene in the coal market to tame record high prices.

West Texas Intermediate crude oil slipped 1.10%, to $82.05 per barrel. Brent crude, oil’s international benchmark, fell 0.93%, to $84.29 per barrel.

Gold jumped as much as 1.04%, to $1,787.45 per ounce.

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US stocks slip as China growth slowdown, energy crisis dampen bullishness

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange.

US stocks slipped on Monday as a slowdown in China’s growth and a continuing energy crisis dampened investors’ sentiment.

The Dow Jones Industrial Average fell at the start of the trading week, so did the other two major indexes. Among the biggest drags is the mega-cap tech giant Apple.

Here’s where US indexes stood at the 9:30 a.m. ET open on Monday:

While China’s economy expanded by 4.9% in the third quarter, according to data from the National Bureau of Statistics, the growth was slower than the 7.9% rise the country tacked on in the previous quarter and was the nation’s weakest pace since the third quarter of 2020.

Industrial output posted its worst performance since the start of the pandemic, made worse by power shortages, supply-chain woes, and debt problems in its property sector.

Outside of China, the crises in commodities continued to hound global markets, particularly the ongoing energy crunch.

“There is also much discussion on how long-term forward-looking inflation expectations are now spiking,” Hans Mikkelsen, Bank of America Credit Strategist, said in a Monday note. “Obviously, there are many drivers in inflation – such as reopening related bottlenecks that also leave labor unions with more bargaining power, higher energy prices.”

Mikkelsen said the economy is now looking at a “high growth, high inflation environment, in which reopening trades and cyclicals outperform.”

Previously, Francisco Blanch, Bank of America Global Commodities and Derivatives Research Head, provided Insider with four possible paths he sees through early 2022 from an economic crash to an interest rate hike.

Oil prices rose Monday. West Texas Intermediate crude tacked on 1.59% at $83.59 per barrel. Brent oil, the international benchmark, added on 1.10% to $85.79 after notching its eighth consecutive week of gains last week in what is so far its longest streak since a 10-week period through April 1999.

Gold dropped 0.46% to $1,762.79 per ounce.

The 10-year Treasury note yield edged up to 1.619% from Friday’s 1.574%. Yields rise when prices fall.

In cryptocurrencies, bitcoin surged 5.5% to $62,667 ahead of an imminent exchange-traded fund approval this week. Bitcoin’s rally has pushed the entire cryptocurrency market capitalization above $2.6 trillion over the weekend for the first time since May.

Meanwhile, Square CEO Jack Dorsey said his digital payments company is weighing up whether to create a simple-to-use bitcoin mining rig and laid out how it could help the industry.

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US stocks rise as investors digest Fed minutes showing tapering on track for November

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 12, 2021.

US stocks ended higher on Wednesday as investors digested minutes from the Federal Open Market Committee’s meeting in September, which showed central bank officials broadly agreeing to begin tapering assets as soon as November, scaling back pandemic-era support for the economy.

“Participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate,” minutes from the September 21-22 meeting said.

The tech-heavy Nasdaq outpaced the S&P 500 and the Dow, led by mega-cap tech companies such as Amazon and Microsoft as the yield on the 10-year Treasury slipped to 1.545%.

Here’s where US indexes stood at the 4:00 p.m. ET close on Wednesday:

The minutes released were a confirmation on Fed plans but conveyed nothing unexpected, said Lawrence Gillum, fixed income strategist for LPL Financial, in a note.

“There wasn’t much new information to move markets,” he said. “The tapering process could start in either mid-November or mid-December-we still think November but one month isn’t going to matter to markets at this point. There was some interesting discussion on lift-off though and it looks like the Committee remains divided.”

The Consumer Price Index – a commonly used measure of US inflation – rose 0.4% in September, exceeding the median forecast of a 0.3% gain from economists surveyed by Bloomberg. The print shows price growth unexpectedly picking up from the 0.3% jump seen through August.

Koss surged 43% in two days after meme stock fans cheered the headphone-maker’s patent victory over Apple. Another occasional meme stock, Plug Power, climbed 13% after the hydrogen fuel-cell developer said it inked partnerships with Airbus and Phillips 66.

In cryptocurrencies, Bank of England Deputy Governor Jon Cunliffe said a collapse in the crypto market is “plausible,” and regulatory action is urgently needed.

Meanwhile, the US has unseated China as the world’s biggest bitcoin miner, accounting for a third of the global hash rate after Beijing banned all cryptocurrency transactions, data from the Cambridge Center for Alternative Finance published on Wednesday showed.

Oil prices slipped. West Texas Intermediate crude slipped 0.14% to $80.53 per barrel. Brent oil, the international benchmark, turned lower, down 0.19% to $83.26.

Russian President Vladimir Putin told CNBC the price of oil could reach $100 a barrel as global energy demand for the commodity skyrockets while supply continues to remain tight.

Gold rose 0.89% to $1,776.08 per ounce.

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US stocks edge higher as inflation data shows prices continued to surge in September

A trader works on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City, U.S., August 26, 2019.

US stocks were higher on Wednesday after inflation continued to rise in September amid continued supply chain bottlenecks.

The Consumer Price Index – a commonly used measure of US inflation – rose 0.4% last month, exceeding the median forecast of a 0.3% gain from economists surveyed by Bloomberg. The print shows price growth unexpectedly picking up from the 0.3% jump seen through August.

While the Delta variant began to subside in late September, supply bottlenecks are still plaguing businesses and consumers.

Here’s where US indexes stood at the 9:30 a.m. ET open on Wednesday:

The prospect of hot inflation alongside stalled economic growth has weighed on markets, and a surge in energy prices fueled concerns that higher inflation may be less transitory than the Federal Reserve is predicting, said Nancy Davis, founder of Quadratic Capital Management and portfolio manager of an exchange-traded fund.

“If the recent pace of elevated inflation continues, that could push the Federal Reserve to start removing accommodation sooner rather than later, which could hurt stocks and other risk assets,” she said in a note Wednesday.

How inflation will affect the economy still recovering from the depths of a pandemic recession remains center stage for many economists and analysts. Fed officials have been hinting that the central bank appears on track to fully taper off assets purchases by the middle of 2022.

“Wednesday’s Consumer Price Index coincides with the start of third-quarter earnings season, and investors will be looking to see if inflation is starting to negatively affect corporate profits in a significant way,” Davis said.

JPMorgan Chase reported earnings Wednesday. The largest US bank reported third-quarter earnings that beat analyst expectations, driven by a strong performance in its investment banking division.

In cryptocurrencies, Binance will end the use of the Chinese yuan on its peer-to-peer platform. The company, which is one of the world’s largest exchanges, is set to discontinue support for the Chinese currency on December 31 this year, it said in a statement Wednesday.

Oil prices slipped. West Texas Intermediate crude slipped 0.67% to $80.12 per barrel. Brent oil, the international benchmark, turned lower, down 0.74% to $82.80.

Gold rose 0.89% to $1,776.08 per ounce.

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US stocks rally, with the Dow climbing 337 points on debt ceiling optimism

Traders work on the floor of the New York Stock Exchange during the afternoon of December 18, 2014 in New York City.

US stocks rallied on Thursday as investors cheered the announcement that legislators have agreed to raise the federal borrowing limit until December, averting a potentially destructive default on the country’s debt.

The benchmark S&P 500 edged higher while the tech-heavy Nasdaq also ticked up. The Dow Jones Industrial Average jumped more than 300 points.

Here’s where US indexes stood at the 4:00 p.m. ET close on Thursday:

“The outlook for 2022 remains optimistic given markets are still expecting Democrats to ultimately deliver infrastructure spending and President Biden’s economic plan by December,” Edward Moya, senior equity analyst at foreign exchange firm Oanda, said in a note.

He noted that Republican Senator Mitch McConnell’s chess move was “brilliant” as it puts all the pressure back on the Democrats. This, Moya added, increases the likelihood that Democrats run out of time to deliver more spending and tax increases.

Investors are also trying to anticipate when the Federal Reserve will begin tapering asset purchases amid inflationary pressures.

“We believe that inflation will continue to build up over the coming months, peaking close to 5% core CPI early next year before moving lower – an environment that resembles reflation more than stagflation,” Gargi Chaudhuri, head of iShares investment strategy, said in a note Thursday.

The yield on the benchmark 10-year Treasury note rose to 1.575% Thursday from 1.524% Wednesday. Yields and prices move inversely.

US jobless claims totaled 326,000 last week, the Labor Department announced Thursday, coming in below the median forecast of 348,000 from economists surveyed by Bloomberg. It also snapped a three-week streak of gains.

In cryptocurrencies, bitcoin was trading 1.55% lower to $54,121 after breaching $55,000 on Wednesday. Bitcoin’s near 35% rally over the past week comes as investors reassess its appeal as an inflation hedge, JPMorgan said in a note.

Dogecoin spin-off shiba inu continued its monster rally, having risen by over 300% in a week to a $12 billion valuation, according to Coinmarketcap. It has gained around 350% in a month, roughly what bitcoin has gained in a year.

The US Securities and Exchange Commission has recently approved Volt Equity’s ETF, which aims to track companies that hold a majority of their net assets in bitcoin or derive a majority of their profit or revenue from bitcoin-related activities.

Oil rallied after the US said it may not release emergency crude reserves to combat rising gas prices, Reuters reported.

West Texas Intermediate crude oil rose as much as 1.38%, to $7.50 per barrel. Brent crude, oil’s international benchmark, climbed 1.32%, to $82.15 per barrel.

Gold edged lower by 0.47%, to $1,755.89 per ounce.

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Dow rises 285 points on investor optimism over debt ceiling extension

happy trader nyse

US stocks were higher on Thursday as investors cheered the proposed debt ceiling extension until December.

The benchmark S&P 500 edged higher Thursday while the tech-heavy Nasdaq-100 rose. The Dow Jones Industrial Average was up nearly 300 points.

Here’s where US indexes stood at the 9:30 a.m. ET open on Thursday:

Worries were mounting as US legislators engaged in a tense standoff ahead of an October 18 deadline to raise the debt ceiling or default on the country’s debt.

On Wednesday, both parties made some headway after Senate Minority Leader Mitch McConnell said he was willing to offer a short-term debt ceiling extension until December.

Beyond the political drama, investors continue to anticipate when the Federal Reserve will begin tapering asset purchases amid inflationary pressures driven by a surge in commodity prices, particularly oil, and supply chain issues.

“We believe that inflation will continue to build up over the coming months, peaking close to 5% core CPI early next year before moving lower – an environment that resembles reflation more than stagflation,” Gargi Chaudhuri, head of iShares investment strategy, said in a note Thursday.

The yield on the benchmark 10-year Treasury note rose to 1.55 % Thursday from 1.524% Wednesday. Yields and prices move inversely.

US jobless claims totaled 326,000 last week, the Labor Department announced Thursday, coming in below the median forecast of 348,000 from economists surveyed by Bloomberg. It also snapped a three-week streak of gains.

In cryptocurrencies, bitcoin was 3.38% higher to $54,156 after breaching $55,000 on Wednesday when Securities and Exchange Chair Gary Gensler said he has no plans to ban crypto.

Meanwhile, dogecoin spin-off shiba inu is continuing its monster rally, having risen by over 300% in a week to a $12 billion valuation, according to Coinmarketcap. For the month, it gained around 350% in a month – roughly what bitcoin has gained in a year.

Natural gas prices fell 4% after Russian leaders including President Vladimir Putin offered to stabilize the European gas market by indicating that supply could increase through Ukraine. The trend spilled over to other commodities.

West Texas Intermediate crude oil slipped 0.71%, to $76.88 per barrel. Brent crude, oil’s international benchmark, fell 0.48%, to $80.69 per barrel.

Gold edged lower by 0.52%, to $1,755.04 per ounce.

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Nasdaq falls more than 2% as rising bond yields drag mega-cap tech names lower

Traders work at the New York Stock Exchange in New York, the United States, Nov. 20, 2018.
New York Stock Exchange on Nov. 20, 2018.

US stocks tumbled on Monday dragged by tech-heavyweights like Facebook and Amazon amid rising Treasury yields.

The benchmark S&P 500 fell more than 1.5% – slipping below its 100-day moving average – while the tech-heavy Nasdaq 100 slid more than 2%.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

Facebook fell as much as 4% after a whistleblower alleged that the company does little to stop the spread of hateful content on its platform.

Global markets in the past weeks have been on a downtrend as investors try to anticipate when the Federal Reserve will begin tapering asset purchases amid inflationary pressures driven by a surge in commodity prices and supply chain issues.

These factors have pushed yields higher, with tech stocks in particular bearing the brunt.

“The Nasdaq is the punching bag as global bond yields rise and as many investors anticipate the cyclical rotation trade will become the playbook after the DC debt drama,” Edward Moya, senior market analyst at foreign exchange Oanda, said in a Monday note.

Also looming is the continuation of the debt ceiling crisis that Congress is trying to avert later this month.

A default would erode trust in the dollar and cause interest rates to soar, which would lift mortgage, car loan, and credit card costs for borrowers. S&P said it would cut its rating to the worst-possible rank of D in the event of a single non-payment on government debt.

Despite this, many analysts, including LPL Financial, remain bullish for the fourth quarter – a period that has historically been best time of year for stocks. Beyond 2021, chief market strategist Ryan Detrick and equity strategist Jeff Buchbinder are also optimistic.

“We see a favorable economic environment for stocks in 2022, consistent with prior mid-cycle expansion years and bolstered by continued earnings growth,” they said in a Monday note. “The gains may not come easy, however, with a number of risks.”

In cryptocurrencies, dogecoin spinoff shiba inu coin jumped 30% after Tesla CEO Elon Musk tweeted another picture of his puppy late Sunday.

Bank of America began coverage of digital assets in a report published Monday. According to the note, the crypto and blockchain sectors are simply too big for investors to ignore.

Oil prices spiked after OPEC+ on Monday agreed to keep its existing schedule of gradual hikes in oil production, adding to inflationary pressures engulfing global markets.

West Texas Intermediate crude oil jumped 2.37%, to $77.68 per barrel. Brent crude, oil’s international benchmark, rose 2.59%, to $81.33 per barrel.

Bank of America said last week that Brent crude could hit $100 a barrel for the first time since 2014.

Gold rose 0.17%, to $1,766.30 per ounce.

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US stock slip as traders closely watch Evergrande drama and debt ceiling talks

Traders work at the trading floor in the New York Stock Exchange on Aug. 19, 2021.
New York Stock Exchange on Aug. 19, 2021.

US stocks slipped on Monday as investors closely eyed new developments in the the Evergrande saga, with trading of the property developer’s stock suspended in Hong Kong. and looked for signs that Congress could avert the looming debt ceiling crisis later this month.

The benchmark S&P 500 fell after posting its biggest weekly loss since February. The Dow Jones Industrial Average also slid lower, after spiking nearly 500 points on Friday.

Here’s where US indexes stood at the 9:30 a.m.ET open on Monday:

Trading in shares of embattled Evergrande and its property management unit were suspended Monday pending an announcement about a “major transaction.” The trading halt came as another debt payment loomed, with no sign that the world’s most indebted company had met two obligations to foreign investors last week.

This came as Chinese local media reported Monday that Evergrande is set to sell a 51% stake in its property management unit to Hopson Development for $5.1 billion.

In the US, Republicans continued to block attempts by Democrats to renew the country’s ability to pay its bills. Congress has just 16 days to raise or suspend the debt ceiling to dodge what could be a potentially catastrophic hit to the economy.

A default would erode trust in the dollar would fade and cause interest rates would soar, which would lift mortgage, car loan, and credit card costs. S&P said it would cut its rating to the worst-possible rank of D.

“Investors should brace for more stock market volatility throughout October, which is also a seasonally turbulent time for stocks, as worries about inflation, supply chain issues, China and Fed policy are still with us,” Pestrichelli said in a Monday note.

“The next hurdle for the stock market is Friday’s jobs report, which has implications for the inflation story and the trajectory of Federal Reserve policy,” he added.

Shares of Tesla jumped almost 3% premarket after the EV maker smashed analyst estimates with its third-quarter deliveries, despite the chip shortage plaguing the auto industry.

In cryptocurrencies, Compound, one of the biggest decentralized finance platforms in the world, saw $160 million worth of cryptocurrency at risk after a routine network upgrade went wrong.

Bitcoin is trading flat, down 0.63%, to $47,826.

Oil prices wavered, but were slightly higher ahead of the OPEC+ meeting later today, which could determine whether production targets will be adjusted to calm tremors in the global energy market. Members of the committee will likely discuss whether to lift targets gradually or open the taps at a faster rate to bring down prices.

West Texas Intermediate crude oil jumped 0.21%, to $76.04 per barrel. Brent crude, oil’s international benchmark, rose 0.34%, to $79.55 per barrel.

Bank of America said last week that Brent crude could hit $100 a barrel for the first time since 2014.

Gold slipped 0.33%, to $1,757.43 per ounce.

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