Mumbai, 17 Jul (Commoditiescontrol): Gold surged to a record high on Wednesday as global markets prepared for potential interest rate cuts. Bonds rallied, while stocks in Taiwan declined following U.S. presidential candidate Donald Trump's lukewarm stance on Taiwan's defense.
The S&P 500 reached new record highs overnight, and futures remained steady in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan stayed flat, with Japan's Nikkei rising 0.1%.
Taiwan Semiconductor Manufacturing Company (TSMC) saw a 2% drop in its stock, erasing nearly $16 billion in market value after Trump suggested Taiwan should pay for U.S. protection in a Bloomberg Businessweek interview. Trump's foreign policy, influenced by his selection of trade hawk J.D. Vance as running mate, indicates a focus on China.
Chinese stocks remained subdued for the second consecutive day. The Taiwan dollar dipped to a two-week low, while China's yuan steadied at 7.2676 per dollar.
New Zealand shares reached their highest since March 2022 following data showing slowing inflation, although the rates market dipped, and the currency rose due to persistent domestic inflation.
U.S. Treasuries held gains, with 10-year yields at four-month lows after Federal Reserve Chair Jerome Powell expressed confidence in cooling inflation. Fed funds futures have priced in a U.S. rate cut for September, with two more expected by January 2025. Ten-year yields remained at 4.175%, and two-year yields hovered at 4.445%. Bond markets in Australia, Japan, and South Korea also rallied.
Gold prices surged past chart resistance around $2,450 per ounce, reaching a record $2,478 in Asia trade on Wednesday, despite a strong dollar. The Japanese yen weakened slightly to 158.51 per dollar but remained above the 38-year low of 161.96 touched earlier in July. The euro was stable at $1.0925.
Oil prices fell slightly amid concerns over weakening demand from China. Brent crude futures dropped 13 cents to $83.60 a barrel, while U.S. crude futures also fell 13 cents to $80.63 a barrel.
Markets are also watching British inflation data, with a focus on services inflation, which is expected to run at a still-hot 5.6% year-on-year in June.
(By Commoditiescontrol Bureau: 09820130172)
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