Gold Soars – Europe Market Wrap
Gold’s unprecedented rally pushed higher on efforts by China to bolster its role in global bullion markets. Stocks paused an advance that lifted the S&P 500 to yet another record.
Bullion powered beyond $3,780 an ounce, putting the metal on track for its best month since 2020. The rally gained fresh momentum on Tuesday after a report that the People’s Bank of China is looking to be a custodian of sovereign reserves, courting friendly countries to buy bullion and store it within its borders.
US stock futures traded indecisively early on, repeating a pattern of the past two sessions that gave way to extended rallies. Nvidia slipped 0.7% premarket after Monday’s jump.
Europe’s Stoxx 600 rose 0.2% after data showed the euro area’s private sector expanded at the fastest pace in 16 months. US Treasuries climbed across the curve, with the 10-year yield slipping one basis point to 4.13%. The dollar steadied.
Investors are rushing to gold as the prospect of rapid US interest rate cuts enhances the appeal of non-interest-bearing assets. The metal is also drawing haven demand amid geopolitical upheaval and pressure on the Federal Reserve from the Trump administration to lower rates, stocking fears about inflation.
Traders are awaiting fresh Fed signals ahead of a speech by Chair Jerome Powell on Tuesday as earnings season looms as the next big test for stocks. Coming up as well is the first of three shorter-term debt auctions, beginning with a $69 billion sale of two-year notes.
US Stocks are holding gains from a $15 trillion rally since April’s lows, shaking off trade tensions and concerns about stretched valuations as traders bet a dovish Fed will fuel earnings amid excitement over artificial intelligence. The view was reinforced Monday as NVIDIA pledged to invest as much as $100 billion in OpenAI.
