Gold prices falling as stocks worldwide overshadowed by Wall Street rally
ALBAWABA – Stocks worldwide were mixed on Monday as gold prices slid below the $2,000 threshold they crossed last week ahead of the United States (US) Federal Reserve (Fed) policy meeting tomorrow.
According to Forbes, it is unlikely that the Fed will raise US interest rates in its 2-day meeting, December 12-13, especially since US inflation figures have been declining over the past few months.
Meanwhile, Agence France-Presse (AFP) highlighted that the strong US jobs figures from last weekend suggest the US central bank is getting closer to delivering a soft land for the US economy.
The forecast-beating read on jobs on Friday – and a pick-up in consumer sentiment – tempered expectations for interest rate cuts in the new year.
Most Forecasts have pushed estimates for the first rate cut from March to May, in light of Friday’s strong US jobs report. Still, the reading did not discourage expectations that the Fed is done hiking rates.
Readings on consumer prices and retail sales are due this week.
Investors will also be keeping an eye on decisions by the European Central Bank and Bank of England this week, AFP reported.
Gold prices dip as market expectations shift on latest data, stocks worldwide mixed
Chinese stocks swung to a gain with a spike in volumes for an exchange-traded fund tracking state-owned shares fueling speculation of buying by state funds.
Stocks worldwide mixed as gold prices slide - Shutterstock
China’s CSI 300 Index climbed 0.5 percent after earlier dropping as much as 1.6 percent, Reuters reported. Sentiment may also have been boosted after local media reported a Chinese macro hedge fund said the nation’s stock market is now offering a “once-in-20-year opportunity”.
The US dollar strengthened against most of its major peers, while Treasury 10-year yields rose three basis points to 4.25 percent.
In the meantime, gold prices dropped dramatically Sunday through Monday, falling significantly below the $2,000 threshold they breached last week.
Gold prices hit an all-time high of over $2,070 per ounce last week and held their positions near the highest levels since records began in 1973.
However, gold prices began to slide after strong economic data came out this weekend, undermining expectations of an early US interest rate cut in March.
Gold prices were last at $1,992.12 per ounce, according to GoldPrice.org, at 1300 Amman Time, down 1.73 percent on Monday.
Stocks worldwide mixed, gold prices down ahead of Fed meeting
The S&P 500 capped a sixth week of gains on Friday, marking its longest winning run since November 2019, according to Bloomberg. The rally on Wall Street came after solid payroll data backed speculation the world’s largest economy will be able to avoid a recession.
Stocks worldwide mixed as gold prices slide - Shutterstock
Shanghai was up, along with Tokyo, Sydney, Seoul, Taipei and Mumbai, but Hong Kong, Singapore, Wellington, Manila and Jakarta were in retreat.
London fell at the open, while Frankfurt was flat and Paris rose.
The yen fell more than one percent against the dollar on waning expectations the Bank of Japan will shift away from its ultra-loose monetary policy, according to AFP.
The Japanese Yen surged to a four-month high in the middle of last week on bets that governor Kazuo Ueda will adjust monetary policy. Especially after he said handling monetary policy "will become even more challenging from the year-end and heading into next year".
Stocks worldwide: Markets summary by AFP and Bloomberg
Tokyo - Nikkei 225: UP 1.5 percent at 32,791.80 (close)
Hong Kong - Hang Seng Index: DOWN 0.8 percent at 16,201.49 (close)
Shanghai - Composite: UP 0.7 percent at 2,991.44 (close)
London - FTSE 100: DOWN 0.1 percent at 7,544.90
Dollar/yen: UP at 146.45 yen from 144.97 yen on Friday
Euro/dollar: DOWN at $1.0753 from $1.0767
Pound/dollar: DOWN at $1.2541 from $1.2550
Euro/pound: UP at 85.78 pence from 85.76 pence
New York - Dow: UP 0.4 percent at 36,247.87 (close)
S&P 500 futures were little changed as of 6:14 a.m. London time
Nikkei 225 futures (OSE) rose 1.7 percent
S&P/ASX 200 futures were little changed
Japan’s Topix rose 1.5 percent
Hong Kong’s Hang Seng fell 1.2 percent
The Shanghai Composite rose 0.4 percent
Euro Stoxx 50 futures were little changed
The Bloomberg Dollar Spot Index rose 0.1 percent
The euro was little changed at $1.0769
The Japanese yen fell 0.5 percent to 145.63 per dollar
The offshore yuan fell 0.1 percent to 7.1957 per dollar
