London (AFP) – Gold prices jumped to fresh records Monday on rising worries about geopolitics, tariff threats, and another potential US government shutdown, while Wall Street stocks drifted higher ahead of earnings from tech giants. The dollar fell, meanwhile, amid speculation of US-Japanese central bank coordination to support the yen.
Gold climbed above $5,100 an ounce before retreating a bit as markets reacted to rising global uncertainty set off by US President Donald Trump’s policies and statements, including threats to impose deep tariffs on China. “It vaulted over the psychologically important 5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US unnerved investors,” said Susannah Streeter, chief investment strategist at Wealth Club. By comparison, gold could be had for just over $2,000 an ounce only two years ago. Silver prices have also spiked to record territory. Shortly after 2000 GMT, gold was at $5,037.14 an ounce.
“The relentless quest for hard assets continued amid yet more talk of tariffs and US government shutdowns,” said Neil Wilson, a strategist at Saxo UK. Wall Street stocks enjoyed a benign session, with the S&P 500 finishing up 0.5 percent. Shares of Apple, Microsoft, and Facebook won solid gains ahead of earnings later this week, reflecting “a little bit of front running of the idea that (the tech companies) would come in with good results yet again,” said Briefing.com analyst Patrick O’Hare.
US investors largely shrugged off a growing furor in the United States over the latest killing of a civilian by Trump’s crackdown in Minnesota over immigration enforcement. Several US senators said they would vote against coming government spending bills after federal agents killed a second American citizen in Minneapolis, significantly increasing the chances of a government shutdown next week.
The dollar was weighed down by a surge in the yen on speculation that authorities may intervene to prop up the Japanese currency, but also by limited visibility on the US economy and on inflation. “The FX (foreign exchange) market is front and center at the start of this week and the focus is on the huge move higher in the yen,” said Kathleen Brooks, research director at XTB trading group. “Reports suggest that Japanese officials were joined by the Federal Reserve Bank of New York who bought yen to support the beleaguered currency,” she added.
The yen had slid amid worries about Japan’s fiscal position, the central bank’s decision to hold off on interest rate hikes, and expectations that the US Federal Reserve will stay put on the rates front this week. The yen’s rebound weighed on Tokyo’s stock market because of its negative impact on exporters. The US Fed is expected to hold interest rates steady this week despite Trump’s pressure to slash them, which is seen as a threat to its independence, traditionally one of the pillars of US assets’ solidity.
Key figures at around 2110 GMT –
New York – Dow: UP 0.5 percent at 49,412.40 (close)
New York – S&P 500: UP 0.5 percent at 6,950.23 (close)
New York – NASDAQ Composite: UP 0.4 percent at 23,601.36 (close)
London – FTSE 100: UP 0.1 percent at 10,148.85 (close)
Paris – CAC 40: DOWN 0.2 percent at 8,131.15 (close)
Frankfurt – DAX: UP 0.1 percent at 24,933.08 (close)
Tokyo – Nikkei 225: DOWN 1.8 percent at 52,885.25 (close)
Hong Kong – Hang Seng Index: UP 0.1 percent at 26,765.52 (close)
Shanghai – Composite: DOWN 0.1 percent at 4,132.61 (close)
Dollar/yen: DOWN at 153.98 yen from 155.70 yen on Friday
Euro/dollar: UP at $1.1883 from $1.1828
Pound/dollar: UP at $1.3682 from $1.3643
Euro/pound: UP at 86.85 from 86.69 pence
Brent North Sea Crude: DOWN 0.4 percent at $65.59 per barrel
West Texas Intermediate: DOWN 0.7 percent at $60.63 per barrel
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© 2024 AFP
