Gold prices slightly down as stocks worldwide surge on 2024 rate cuts hopes
ALBAWABA – Stocks worldwide surged on Wednesday and gold prices were little changed over $2,000 per ounce as the United States (US) Federal Reserve (Fed) maintained efforts to temper expectations of multiple interest rate cuts in 2024.
Meanwhile, the Japanese Yen fell against the US dollar after the Bank of Japan (BoJ) announced it will not be moving away from its negative interest rate policy.
The Yen fell as much as 1.1 percent to the weakest level in a week, while the Nikkei 225 Index rallied 1.4 percent to a two-week high against the weaker Yen, according to Bloomberg.
The Stoxx Europe 600 index edged higher, while US index futures were little changed after solid gains on Wall Street reportedly pushed the Nasdaq 100 as well to a record for the second consecutive session.
All three main US stock indexes, the Dow Jones, S&P 500 and the now the Nasdaq 100 have hit new records, with the Dow at an all-time high and the S&P at a multi-year high.
Wall Street rallies on, stocks worldwide up as gold prices hold steady
Wall Street extended its seemingly relentless advance, fuelled by the Fed's dovish pivot last week, as trading in Asia gradually picked up as the day progressed, as reported by Agence France-Presse (AFP).
Stocks worldwide up again, gold prices steady - Shutterstock
Fed officials have reportedly reaffirmed that the current rates will be effective in bringing inflation down to the central bank’s two percent target but warned it may be too early to talk about cutting rates.
However, the "dot plot" forecast for rates, which was released by the Fed last week, pointed to at least a 0.75 percent cut in 2024, while predictions estimate it may be up to 1.5 percent, according to AFP.
Central bank chiefs and officials have been trying to tame runaway rate cut expectations, which have been fuelling a record rally on Wall Street and stocks worldwide, and in gold prices.
Gold prices slipped by 0.07 percent, according to GoldPrice.org, having lost around $1.56 on the ounce, at $2,026.3.
In the month ending December 18, gold prices climbed 2.53 percent from $1,981.32 to $2,072.04 per ounce, having already made some advances earlier in November as well.
Notably, Reporters reported European Central Bank (ECB) member Francois Villeroy de Galhau as saying that interest rates should be lowered some time in 2024.
Inflation should be back down to the ECB's 2 percent target by 2025 at the latest. "This is not just a forecast, this is a commitment," he said.
Reassurances by the ECB and Fed helped bolster markets and reaffirmed expectations of solid interest rate cuts in the new year.
Stocks worldwide marks up on lower rates outlook, gold prices hover over $2k
The supportive sentiment helped boost global markets more broadly, with the MSCI World Equity index up 0.1 percent on the day, as reported by Reuters.
Stocks worldwide up again, gold prices steady - Shutterstock
Europe's STOXX 600 was up 0.2 percent and London's FTSE 100 was up 0.1 percent.
Contrary to the global trend, however, the MSCI Asia Pacific Index fell 0.1 percent, Bloomberg reported, though Japan’s Nikkei and China’s Shanghai Composite were both in the green, as per AFP.
The MSCI Emerging Markets Index slipped 0.2 percent.
The euro was up 0.2 percent at $1.0942 and the US dollar index was flat at 102.5, according to Reuters, after dropping 1.3 percent last week, while the 10-year US Treasury yield was at 3.9107 percent.
Stocks worldwide: Markets summary by AFP and Bloomberg
Tokyo - Nikkei 225: UP 1.4 percent at 33,219.39 (close)
Hong Kong - Hang Seng Index: DOWN 0.8 percent at 16,505.00 (close)
Shanghai - Composite: UP 0.1 percent at 2,932.39 (close)
London - FTSE 100: UP 0.1 percent at 7,623.16
Dollar/yen: UP at 144.10 yen from 142.73 yen on Monday
Euro/dollar: DOWN at $1.0911 from $1.0919
Pound/dollar: UP at $1.2657 from $1.2650
Euro/pound: UP at 86.36 pence from 86.31 pence
New York - Dow: FLAT at 37,306.02 (close)
The Stoxx Europe 600 rose 0.2 percent as of 8:09 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average were little changed
The MSCI Asia Pacific Index fell 0.1 percent
The MSCI Emerging Markets Index fell 0.2 percent
Bitcoin rose 1.1 percent to $43,094.81
Ether rose 1.5 percent to $2,249.99
