The precious metal surpassed the peak achieved in 2011 as investors expected the Fed to reaffirm its dovish message
Asian equities were set for a modest rise today as investors weighed progress in US government stimulus efforts against rising tensions with China and the growing coronavirus pandemic, while gold hit a record high.
Gold jumped more than 1 per cent to surpass its 2011 peaks, and put US$2,000 per ounce in sight, as investors expected the US Federal Reserve to reaffirm its dovish message this week.
I think we’re going to have a fairly modest start to trade, said Commsec Senior Economist Ryan Felsman in Sydney, pointing to Asian futures rising overnight.
Certainly, there was a positive lead in from the United States, Felsman said.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 4.64 points or 0.86 per cent, to 546.81.
Hong Kong’s Hang Seng index futures were up 0.54 per cent, Japan’s Nikkei 225 futures rose 0.11 per cent and Australian S&P/ASX 200 futures were up 0.43 per cent.
Australia, today, is set to release consumer confidence and payroll data.
On Wall Street, the Dow Jones Industrial Average rose 114.88 points, or 0.43 per cent, to 26,584.77, the S&P 500 gained 23.78 points, or 0.74 per cent, to 3,239.41 and the Nasdaq Composite added 173.09 points, or 1.67 per cent, to 10,536.27.
Investors eyed a US$1 trillion coronavirus aid package announced by US Senate Republicans, hammered out with the White House, as expanded unemployment benefits for millions expire this week, although Democrats urged more support.
The Republican plan is weak tea, when our problems need a much stronger brew, Senate Democratic leader Chuck Schumer said.
Concerns about the US economic outlook have started to weigh on the dollar. The dollar index, which measures the greenback against six other major currencies, dropped 0.5 per cent to its lowest level in nearly two years, supporting the rise in gold.
Moderna Inc’s vaccine against Covid-19 could be ready for widespread use by the end of this year, US and company officials said, after the drugmaker announced the start of a 30,000-subject trial.
US investors, also on yesterday, bet on some of the market’s most high-profile stocks ahead of earnings reports.
Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc, all due to report earnings this week, were among the top boosters of the S&P 500.
But the moves could backfire, said CommSec’s Felsman. There’s a lot of risk for investors that those earnings results may not be as good as expected.
In commodity markets, oil prices rose on hopes that stimulus efforts will help revitalise the US economy, but rising coronavirus cases and tensions between Washington and Beijing capped the gains.
Brent crude LCOc1 rose 7 cents to settle at US$43.41 a barrel, while US West Texas Intermediate (WTI) crude CLc1 rose 31 cents to settle at US$41.60 a barrel.