Gold prices rose to a 10-month high on Tuesday as concerns over a global economic slowdown spurred a safe-haven bid and were also supported by a weaker U.S. dollar, which fell on optimism for a breakthrough in U.S.-China trade talks.
A gauge of global stock markets rose modestly along with gains on Wall Street, while Europe sagged under falling bank shares and concerns that a car tariff could hurt the region’s exports to the United States.
Traders kept a close eye on the new round of talks between the United States and China to resolve their trade spat. Separately, the World Trade Organization warned that a slump of its leading indicator of world trade in goods to its lowest reading in nine years could foreshadow a broader economic downturn, as it highlighted the need to reduce trade tensions.
“Investors still seem to be sitting on their hands until we have more information on the trade front,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada
Canada’s main stock index inched higher on Tuesday, as shares of precious metal miners gained on the back of higher gold prices.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially up 99.20 points, or 0.63 per cent, at 15,937.44.
The materials sector added 2.2 per cent. Turquoise Hill Resources Ltd. jumped 9.8 per cent, while Kinross Gold Corp finished 8.3 per cent higher. Barrick Gold Corp. increased by 4.6 per cent.
In New York, the Dow Jones Industrial Average rose 8.07 points, or 0.03 per cent, to 25,891.32, the S&P 500 gained 4.19 points, or 0.15 per cent, to 2,779.79 and the Nasdaq Composite added 14.36 points, or 0.19 per cent, to 7,486.77.
Consumer discretionary stocks, led by Amazon, provided the biggest lift to the S&P 500 and Nasdaq, while Walmart Inc headed up the blue-chip Dow’s advance.
Walmart reported a better-than-expected jump in same-store sales during the holiday quarter, sending shares of the world’s largest retailer up 2.2 per cent.
“I think Walmart numbers gave a boost to investors, it’s a bit of a proxy for the economy and for consumer sentiment, given its reach,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “So that’s probably given a ray of light to the bulls today.”
The pan-European STOXX 600 index lost 0.22 per cent, and MSCI’s gauge of stocks across the globe gained 0.32 per cent.
Emerging market stocks rose 0.18 per cent. MSCI’s index of Latin American equities bucked the trend in stocks globally with a 1.7 per cent increase, mostly on the back of a 1.45 per cent gain in the Brazilian market.
Gold prices surged to a near 10-month high driven by concerns over slowing global growth as dovish signals from Japan and Europe’s central banks followed weak data from the United States and China.
Spot gold added 0.9 per cent to $1,338.62 an ounce. U.S. gold futures gained 1.54 per cent to $1,342.40 an ounce.
In currencies, the yen was little changed even after Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to ramp up stimulus if the stronger yen derails the path toward its 2 per cent inflation target. The Japanese currency weakened 0.06 per cent.
The offshore Chinese yuan touched its highest level against the dollar since Feb. 1 following a Bloomberg TV report that the United States is pressing to secure a pledge from China that it will not devalue its yuan as a part of a trade deal.
The dollar index fell 0.38 per cent, with the euro up 0.25 per cent to $1.1336.