Stocks worldwide ride Wall Street wave as gold prices surge on weaker US dollar
ALBAWABA – Gold prices rose and stocks worldwide rallied Thursday, following a surge on Wall Street late Wednesday after the United States (US) Federal Reserve (Fed) pinned US interest rates and signalled multiple rate cuts in 2024.
Gold prices broke over the $2,000 threshold again early on Thursday, as the US dollar slipped following the Fed’s statements, rising 2.46 percent, according to Reuters.
By 1135 Amman Time, gold prices were up from the day’s low of just over $1,980, according to GoldPrice.org, to $2,039.28 per ounce.
Meanwhile, the Japanese Yen, Chinese Yuan, and Euro were all up less than 0.7 percent against the dollar, and the Pound Sterling was unchanged.
The US dollar index slipped to 102.56, as reported by Reuters, having hit a multi-month low earlier, at 102.42, marking its lowest level since mid-August.
As gold prices rise, stocks worldwide track US market rally after Fed rate forecasts
The Fed announced pinning US interest rates at their current 5.25-5.5 percent levels late on Wednesday. Whereas members of the Federal Open Market Committee (FOMC) expect rates to be around 0.75 lower by end of 2024, as reported by Agence France-Presse (AFP).
At 0.25 percent per cut, the central bank’s statements signal multiple rate cuts in 2024.
Markets are now pricing in around a 75 percent chance of a rate cut in March, according to CME FedWatch tool, as reported by Reuters, compared with 54 percent a week ago.
Interest rates generally reflect on currency strength.
Anticipations of rate cuts as soon as March in 2024 weighed on the US dollar, bolstering oil prices, stocks worldwide and gold prices.
Gold prices up again, stocks worldwide rally on Fed optimism - Shutterstock
The news sparked a bullish surge on Wall Street, with the Dow Jones ending at a record high of over 37,000, AFP reported, while the S&P 500 closed at a near two-year high.
Treasuries – seen as a guide to future rates – strengthened, with 10-year yields at a four-month low below four percent.
Asia-Pacific markets tracked US stocks, where Hong Kong, Sydney, Seoul, Singapore, Taipei, Manila, Bangkok, Mumbai and Jakarta all climbed. But Shanghai dipped on lingering worries about the struggling Chinese economy.
Tokyo also dropped, partly on a stronger yen, which jumped about 1.8 percent against the US dollar Wednesday.
London and Paris rallied at the open, with Frankfurt opening at a record high.
Oil prices also rose on a weaker US dollar and US crude stockpiles reportedly lower than a week ago.
Stocks worldwide: Markets summary by AFP and Bloomberg
Tokyo - Nikkei 225: DOWN 0.7 percent at 32,686.25 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 16,402.19 (close)
Shanghai - Composite: DOWN 0.3 percent at 2,958.99 (close)
London - FTSE 100: UP 1.7 percent at 7,677.61
Dollar/yen: DOWN at 142.00 yen from 142.89 yen on Wednesday
Euro/dollar: UP at $1.0890 from $1.0878
Pound/dollar: UP at $1.2632 from $1.2617
Euro/pound: UP at 86.23 pence from 86.18 pence
West Texas Intermediate: UP 0.6 percent at $69.86 per barrel
Brent North Sea crude: UP 0.7 percent at $74.78 per barrel
New York - Dow: UP 1.4 percent at 37,090.24 (close)
S&P 500 futures rose 0.4 percent as of 3:24 p.m. Tokyo time
Nasdaq 100 futures rose 0.6 percent
S&P/ASX 200 futures were little changed
Hong Kong’s Hang Seng rose 1.1 percent
The Shanghai Composite was little changed
Euro Stoxx 50 futures rose 1.1 percent
